UPS announced on Tuesday that it will cut 12,000 jobs as it faces a decline in domestic and international package volumes. The shipping company’s fourth-quarter report and 2024 outlook fell short of Wall Street estimates.
CEO Carol Tomé said in an earnings call that the reduction in workforce would save the shipping company about $1 billion in costs.
Most of the job cuts are expected to be in positions of managers and contractors. UPS has a global workforce of about 500,000 employees. Of these, 85,000 employees are managers. It has over 300,000 hourly workers in the US, represented by the Teamsters union.
UPS saw a massive decline in volume after there were rumblings of a possible strike by the Teamsters union. Customers used other shipping companies, and rival carriers gained new business. Although UPS was confident of returning its lost business, about 40 percent of its customers did not return.
UPS also posted results that fell below Wall Street estimates. According to Refinitiv, analysts expected $95.6 billion, but the shipping company reported global revenue between $92 billion and $94.5 billion for 2024. The company reported $91 billion in 2023.
The Atlanta-based shipping company said that layoffs of employees were necessary to “right size” the company after a year that was both “difficult” and “disappointing,” according to its CEO, as there was a massive decline in shipping volumes.
XMicro.com
The company saw a 9 percent decline in revenue and close to a 32 percent fall in profit. This was why there would be a layoff of about 12,000 jobs in the first five months of this year. This translates to approximately 14 percent of the workforce. Employees will also be expected to work in the office five days a week from March.
Some of the companies that have laid off workers early this year include
Google
Microsoft
Salesforce
eBay
Macy’s
Wayfair and others.
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