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DHL to Cut 2,870 Jobs

The layoffs represent 6% of firm's U.S. workforce. Work will shift to newly acquired Airborne.

September 03, 2003|From Times Wire Services

Global courier DHL said Tuesday that it would lay off 2,870 U.S. workers as it shifted package pickup and delivery work to Seattle-based Airborne Inc., which it acquired in August for $1.05 billion.

The layoffs represent about 6% of the company's U.S. workforce of more than 44,000 employees, DHL spokeswoman Kim Levy said.

"While the decision to reorganize these operations was a difficult one, it is an important step as we seek to create a more effective, streamlined organization that eliminates overlap," said John Fellows, chief executive of DHL Holdings Inc.

Levy declined to say how much of a restructuring charge DHL would take for the layoffs.

Workers will be paid and receive benefits through Oct. 31 and will receive severance packages, the company said. The layoffs may include couriers, mechanics and office workers, but Levy could not say what part of the country would be most affected.

DHL, a unit of German postal service Deutsche Post, pursued Airborne in a bid to expand its ability to compete in the U.S.

The layoffs should save Plantation, Fla.-based DHL about $125 million a year in the U.S., where the company has annual revenue of $1.5 billion, said Satish Jindel, president of Pittsburgh-based SJ Consulting Group, which advises shipping companies and customers.

The Airborne purchase gave DHL a ground network with more couriers in more cities than DHL's previous structure, Jindel said.

"They don't need a duplicative network," he said.

Airborne had sought a partner after deciding that was the only way to grow significantly in a market dominated by United Parcel Service Inc. and FedEx Corp.

Associated Press and Bloomberg News were used in compiling this report.

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