As per the news, Struggling shipper DHL declared that it has decided to close its 300-employee West Coast hub in Riverside County. This move will mean 9,500 job cuts throughout the nation and closing most of its DHL Express service centers. DHL has been the preferred partner of many corporates and its shut down of such operations will force these corporates to look for alternative partners.
Why is the DHL lay off or job cut happening?
Market conditions - DHL is said to face tremendous competition form UPS or United Parcel Service and FedEx. Then there were bad financial results and losses due to the ongoing recession in the US economy.
DHL's expertise lies in international shipping and this is what they are banking on for the near future.
What all businesses and units will be closed by DHL?
Due to the losses expected to amount to $1.5 billion for its U.S. operations this year, DHL plans to close 18 U.S. airport hubs and shut all but about 100 of its 412 U.S. service centers. The company projected that daily U.S. package volume would drop to about 100,000 from between 1.2 million and 1.5 million.
"One of the principal reasons for that high unemployment rate has been the collapse of the residential home construction industry," Husing said.
"The whole business of cargo distribution has really slowed down, and when there is less of that, it really affects the express-shipping industry," Husing said.
Laid-off employees will also find it hard to find jobs at DHL's toughest competitors, UPS and FedEx, analysts said.
Let's hope that alternative jobs are available to the affected employees of DHL Lay off.
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