U.S. jobs safe from Deutsche Post axe
The United States operations of Deutsche Post World Net, including DHL Worldwide Express and Danzas AEI, will not be affected by massive job cuts that may be implemented by the German global mail and logistics group.
Deutsche Post warned Wednesday that it may ax up to 10,000 jobs, or 3% of its workforce, to cope with the anticipated loss of revenue following the German government’s decision to lower postage rates.
Shares of the partly-privatized company tumbled after it said the move will cut 2003 earnings by 300 million euros ($297 million) and lead to total losses of around $1.5 billion by 2007.
The job cuts would all come in the German postal operations. Deutsche Post also warned that it may have to cut some of its 13,000 retail facilities in Germany and eliminate several thousand letterboxes.
Hans Toggweiler, chief executive of Danzas AEI in North America, said its operations will not be affected by the layoffs.
The ongoing regulatory assault on Deutsche Post’s domestic mail monopoly has prompted a massive diversification program which continued last week when it increased its stake in DHL International to 75 percent with the purchase of Lufthansa Cargo’s 25 percent holding in the international air express carrier.
In June the European Commission ordered Deutsche Post to repay $566 million in state aid to the German government which it had used to illegally subsidize losses in its domestic parcel delivery business in the late 1990s. Prior to that was fined $24 million for trying to price privately-owned rivals out of the German parcel market.
Deutsche Post, which is 69 percent state-owned, told the Frankfurt Stock Exchange that it can’t make “statements about future dividends and further privatization steps” after the regulatory order to cut postage rates. But analysts say the decision will put pressure on Deutsche Post to accelerate expansion into express and logistics to lessen it dependence on mail.
