DHL ends U.S. operations, cuts 9,500 jobs

DHL ends U.S. operations, cuts 9,500 jobs

Summary: In what may have a catastrophic effect on gadget delivery nationwide, global delivery company DHL has announced that it will be cutting 9,500 jobs and suspending domestic mailing operations.UPS, FedEx, USPS: We hope you've got enough trucks and airplanes to go around!

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TOPICS: CXO, IT Employment
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In what may have a catastrophic effect on gadget delivery nationwide, global delivery company DHL has announced that it will be cutting 9,500 jobs and suspending domestic mailing operations.

UPS, FedEx, USPS: We hope you've got enough trucks and airplanes to go around!

DHL Business is waiting...but no one's coming to pick it up.

 DHL is dropping "domestic-only" air and ground services within the United States "to minimize future uncertainties." (You can still ship with DHL Express internationally from the U.S.) Thankfully, it's doing so by Jan. 30, after the holiday consumer rush.

Somewhere, Santa Claus is breathing a sigh of relief.

DHL's 9,500 job cuts are on top of 5,400 job reductions announced earlier this year, leaving just 3-4,000 employees at 103 stations (down from 412) for DHL's U.S. operations, the company said.

CNNMoney.com reports:

DHL said it was making the cuts to improve profitability and "to prepare the company for the economic challenges ahead."

The company said this latest action would add $1.9 billion to its restructuring costs, for a total of $3.8 billion over two years, most of it during 2008. The company said the cuts would reduce the annual operating costs of DHL U.S. Express to less than $1 billion, from its current cost of $5.4 billion.

DHL is owned by the German company Deutsche Post World Net.

DHL's U.S. pullback should help competitors FedEx Corp (FDX, Fortune 500) and UPS Inc. (UPS, Fortune 500), said Donald Broughton, analyst for Avondale Partners.

"Obviously, it's good news for FedEx and UPS, because this puts the 3-4% market share that DHL had [for domestic ground and air shipping within the U.S.] up for grabs," said Broughton. "Makes it a jump ball, if you will."

UPS stock rose nearly 5% in the first hour of Monday trading, and FedEx stock rose about 4%. Both outperformed the Dow Jones industrial average, the Nasdaq and the S&P 500.

Reportedly, DHL has been working out a deal that would extend its airport-to-airport shipping services within the U.S. to competitor UPS.

Of course, this reeks of cutbacks in the face of a terrible economy, just adding to the 1.2 million jobs that were lost in the first 10 months of this year in the U.S. Sadly, DHL's main hub is in Wilmington, Ohio, a town of just 12,000 people.

Topics: CXO, IT Employment

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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10 comments
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  • I won't miss them!!!!!!

    As a Dell customer, I am constantly receiving shipments from DHL. They might be fast, but their service is TERRIBLE - I live in an upstairs apartment, and they just throw the delivery in the door in the downstairs entranceway! This is not because they don't know - I have the same driver every time. Not to mention the fact that they only deliver to my area three days a week!

    UPS is much more personable, and no matter where you live, you can get delivery on all the days that everyone else gets it. Not only that, but UPS has never "lost" a package and failed to contact either the sender or the receiver - which HAS happened to me with DHL!

    UPS or USPS, forever and ever, AMEN!!!!!!!!

    That's not to say I'm not sorry about the loss of jobs - but I do sincerely hope that the DHL employees are able to find gainful employment with other carriers that provide better service.
    Kasey156
  • First mistake is being a Dell customer.

    :)
    itguy08
  • Dell is what kept them alive this long

    If Dell where to have decided to switch to another carrier last year, DHL would have done [i]this[/i] last year.
    GuidingLight
    • Or Dell could make halfway decent machines instead...

      :o
      HypnoToad
      • Er.. WTF are you babbling about?

        From my experience in the last 12 months or so, the Dells I've come across have been rock solid performers. That's including their budget laptop line, mainstream laptops, their servers, their workstations, etc...

        In fact, their service goes above and beyond the call of duty. One of my clients has a server that's long since out of warranty and the service guy helped me shop for the right sticks of RAM for the box.

        I wouldn't hesitate to recommend a Dell to anyone looking for new hardware. One of the better selling points - their business line tends to be fairly clean installs of Windows - they don't clutter the box up with a ton of garbage and crapware.
        Wolfie2K3
        • I agree, Dells last for a loooong time, for me

          Maybe it's just me, but we have more than 200 Laptops, PCs and servers in our company. Many of them were bought on eBay many years ago, were talking Dell Latitude C400 and C600 with a PIII running at less than 1 GHz. These are used on the beach in the Caribbean for years. We changed last year two Dell Servers with PII Pro Processors - they were just getting a little bit to slow, but were still running.
          Maybe it's just me, but I think this is pretty good, and I'm not working with or for Dell.
          Nitra Matsoc
  • The first of many

    fasten your seat belts; it's going to be a rough ride.
    frgough
    • Sorry, pal...

      ... The line delivered by Bette Davis in, "All About Eve", was: "Fasten your seatbelts; it's going to be a bumpy ride".
      Great movie; great quote; great comparison.
      Thanks
      Media-Ted@...
  • Paint half the trucks brown,

    then paint the other half white. Oh, and give the junkers to the USPS. Everyone is happy!
    kd5auq
    • unmarked yellow trucks still out there

      At least as of last week, north of Seattle I saw one of the infamous yellow trucks still out there delivering to businesses as usual, the one I recognized (as a regular to my area) appeared to have been very recently stripped of all dhl logos, but still running it's Oregon commercial plates.
      jaybyrd