DHL to End Deliveries Inside US

NEW YORK (CNNMoney.com) -- Global delivery company DHL announced Monday that it was cutting 9,500 jobs as it discontinues air and ground operations within the United States.

DHL said its DHL Express unit will continue to operate between the United States and other nations. But the company said it was dropping "domestic-only" air and ground services within the United States by Jan. 30 "to minimize future uncertainties."

"We see [a] significant shortfall in the U.S. part of our express business due to the fact that the economy has weakened deeply," said Frank Appel, chief executive of DHL's parent company Deutsche Post World Net. "We have taken a massive action in the U.S."

"As you can imagine, this was not an easy decision," said Appel, speaking by webcast from corporate headquarters in Bonn, Germany. "It has a massive impact on jobs for our people."

Elias Sleiman, a quality control worker and one of 375 DHL employees at a shipping facility in Allentown, Pa., said the company has scheduled a 10:30 p.m. meeting to explain their fate.

DHL's 9,500 job cuts are on top of 5,400 job reductions announced earlier this year. After these layoffs, between 3,000 and 4,000 employees will remain at DHL's U.S. operations, the company said.

The company also said it was shutting down all ground hubs and reducing the number of its U.S. stations to 103 from 412.

Because DHL isn't U.S.-owned, the company isn't permitted to make deliveries between U.S. airports. Instead, these services are currently performed for DHL by U.S.-based carriers like ABX Air, Inc. and Air Cargo Carrier, which are both based in Wilmington, Ohio, DHL's main U.S. hub.

As DHL scales down its domestic operations, it's working on a deal to outsource these services to UPS Inc., based in Atlanta. If the deal goes through, then UPS could transport DHL packages between U.S. airports, instead of ABX and ASTAR.