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UPS to cut 12,000 jobs citing less demand, higher costs

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UPS announced it will cut 12,000 jobs this year amid a slowdown in delivery volume, making up some 2.4% of its more than 500,000 global workforce. A UPS spokesperson confirmed that the job cuts would not impact union-represented roles. Jobs throughout the world and in all functions would be affected at the company, and 75% of the reductions would come in the first half of the year, the spokesperson said.

The company reported during a company earnings call Tuesday that the daily average shipping volume is down 7.4 percent domestically, and there’s been an 8.3 percent decrease in domestic shipping. UPS announced its fourth quarter revenue was $24.9 billion, down 7.8 percent from $27 billion the year before. UPS says that the cut could save the company $1 billion, citing the softer demand and higher union labor costs. Amid the declining revenue and job cuts, the company also reported returning $7.6 billion to shareholders through dividends and stock buybacks.

UPS CEO Carol Tomé said in a statement: “2023 was a unique, and quite candidly, difficult and disappointing year. We experienced declines in volume, revenue and operating profits and all three of our business segments. Through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth.”  Tomé also announced that UPS would ask employees to return to the office five days a week this year and said the company is exploring options to sell its “highly cyclical” freight brokerage business, Coyote

In July, UPS agreed to a contract with the Teamsters union that pushed the top pay for experienced full-time drivers to $49 an hour and $21 an hour starting pay for a part-time worker.

UPS shares were down more than 8% in Tuesday trading following the announcement.

https://abcnews.go.com/Business/wireStory/ups-stock-market-open-company-softer-expected-full-106791152

Editorial credit: Karolis Kavolelis / Shutterstock.com

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