The dismantling of DHL's U.S. delivery system has dispatched a grim economic jolt to the Bay Area: More than 800 DHL workers in the Bay Area are losing their jobs because of the company's decision to halt express deliveries.

According to the union that represents the affected workers, along with formal notices filed with state labor officials, DHL has decided to lay off at least 805 employees in the Bay Area and adjacent communities.

The staff reductions represent the latest blow for a regional economy that has lurched into a recession along with the rest of the nation. DHL had previously said it would dismiss 9,500 workers nationwide but did not specify how many in each area of the country.

"DHL is essentially abandoning the domestic market in the United States and will focus only on its international operations," said Joe Silva, president of Teamsters Local 70.

The East Bay is being particularly hard hit by the DHL downsizing in the U.S., according to Teamsters Joint Council 7, which serves Teamsters members throughout Northern California.

About 265 of the layoffs are slated to hit Alameda County. That includes DHL locations in Oakland, Fremont and Dublin, Silva said.

In addition, DHL will eliminate 266 jobs in San Francisco, 141 jobs in the South Bay, 77 jobs in Sonoma County, and 54 jobs in Watsonville, said Chuck Mack, president of Teamsters Joint Council 7.

"Part of this is because of tough times," Silva said. "But in the case of DHL, I blame the company's leadership," Mack said. "They competed pretty well. But they never figured out how to make money competing."

The company blamed the recession for DHL's retreat from the U.S. arena.

"We are entering unprecedented economic times," said John Mullen, chief executive of DHL Express. "We see risk everywhere. We think it's critical to take action now."

"They are losing money left and right," Mack said. "The reality is that customers are leaving in droves already."

The last day of service for the affected DHL workers is scheduled to be sometime in late January, Mack said.

"We are in the process of negotiating severance packages," Mack said. "Nothing has been settled yet."

George Avalos covers jobs, economic development, commercial real estate, finance and oil companies. Reach him at 925-977-8477 or gavalos@bayareanewsgroup.com