Savings Measures Deutsche Post to Cut 14,900 Jobs in US Retreat
Germany's Deutsche Post revealed plans for a fresh round of job cuts Monday at its troubled US subsidiary DHL in a bid to stem heavy losses. It is also feared layoffs will come at Post's German units.
German logistics giant Deutsche Post announced Monday it will cut 9,500 jobs from its DHL express mail service, marking a dramatic drawback from the firm's United States operations.
DHL is to close all its service centers and halt its loss-leading, US-only domestic shipping by land and air, the company said at its headquarters in Bonn on Monday.
A DHL delivery truck is parked next to a hot dog stand in New York: Mass job cuts are expected at Deutsche Post's US subsidiary.
Deutsche Post blamed its decision on heavy losses in the face of fierce competition from established rivals such as FedEx and United Parcel Service in America. The US business is expected to rack up losses of 1.2 billion euros ($1.5 billion) this year, the company added.
The cuts come on top of 5,400 already announced in DHL's American business, bringing the total to 14,900.
But the company stressed the move did not mark a complete withdrawal from America.
DHL's international express network in the US will continue operating, with 3,000 to 4,000 employees. International shipping deliveries will also remain unaffected.
The US cuts are expected to reduce operating costs at the US Express unit from 4.2 billion ($5.4 billion) to less than 770 million euros ($1 billion dollars) annually.
The restructionng announced Monday is set to cost the company an additional 1.5 billion, bringing its total cost to 3 billion.
Shares of Deutsche Post were up 4.2 percent at 9.77 in Frankfurt trading.
Over the weekend and on Monday, international media, including Germany's Süddeutsche Zeitung and the American Wall Street Journal reported the company's restructuring effort could threaten as many as 33,000 jobs in the US, where Post has 13,000 employees and 20,000 contract workers.
sjr -- with wire reports