Deutsche Post to cut 9,500 jobs in US

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FRANKFURT — Citing heavy losses and fierce competition, the overnight-delivery giant DHL is cutting 9,500 American jobs and significantly reducing its air and ground operations in the U.S., largely leaving the field to FedEx, UPS and the Postal Service.

The cuts are part of a wider plan to curtail operations in the U.S., including domestic ground and delivery services, though DHL's international shipping to and from the U.S. would continue.

DHL's parent company said the new round of cuts are on top of another 5,400 job cuts already announced and blamed heavy losses at the unit, which competes with rivals UPS Inc. and FedEx Corp. The DHL Express unit currently employs some 18,000 workers.

Investors at Deutsche Post, the Bonn-based owner of DHL, cheered the decision, sending the company's shares up 7 percent to 10 euros ($12.90) in Frankfurt trading.

Still, Deutsche Post said the U.S. remained a key market and that its other operations there, including freight and global mail and other logistics, won't be affected by the closings.

Deutsche Post's U.S. logistics unit employs more than 25,000 workers in the U.S.

Part of the plan calls for the halt to domestic shipping by Jan. 30, after the company closes all of its ground hubs and reduces the number of service centers to 103 from 412 across the U.S., it said.

At a press conference, company officials, including chief financial officer John Allan said the job cuts and location closures would be "clear across the country," without being more specific.

"The retained U.S. international Express network with a total of 3,000 to 4,000 employees will be tailored to the needs of the group's international Express service customers," the company said in a statement. "All international shipments into the U.S. will still be delivered, while 99 percent of the outbound shipments will be picked up."

Deutsche Post's decision is expected to reduce operating costs at the U.S. Express unit from $5.4 billion (4.2 billion euros) to less than $1 billion (770 million euros).

"The international Express offering in the U.S. will be maintained on today's levels and the region will remain an integral part of DHL's global Express network," the company added.

Deutsche Post said it expects to spend another $1.9 billion (1.5 billion euros) on the restructuring, bringing the cost to $3.9 billion (3 billion euros) over two years. Most of that will be booked this year.

Because of the restructuring, Deutsche Post said the total losses at its U.S. Express business would reach $1.5 billion (1.2 billion euros) for the year.

The decision was announced as Deutsche Post said its third-quarter net profit more than doubled to 805 million euros ($1 billion) compared with 350 million euros a year earlier. Sales rose 4.1 percent to nearly 14 billion euros ($18 billion).

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