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UPS to cut 12,000 jobs after 'disappointing' year
The parcel delivery giant said it was looking for $1bn in savings, as AI makes up for the jobs.
www.bbc.com
UPS to cut 12,000 jobs 5 months after reaching union deal as revenue outlook for year disappoints
UPS will cut 12,000 jobs and released a revenue outlook for this year that sent its shares down sharply.
apnews.com
Parcel delivery firm UPS has said it will cut 12,000 jobs, after it was hit by a softer economy and a labour fight that scared away some customers.
Chief executive Carol Tomé said 2023 was a "difficult and disappointing year", and the firm was investing in artificial intelligence (AI) as it pushes to become more efficient.
She has also called staff back to the office five days a week.
The job cuts are expected to reduce costs by $1bn (£790m) this year.
UPS, whose business is seen as an indicator of wider economic health, struggled last year with a fall in sales and profits, as the number of packages handled by the firm declined.
The company said that reflected economic weakness in Europe and parts of Asia, as well as disruption in the US, where a strike threatened by staff over the summer led some customers to shift their business to rivals.
UPS said it had since won back about 60% of that business and expected modest growth to start to return this year, with average daily volumes flat or up 2% in the US and flat or up 3% internationally.
But its forecast was weaker than analysts had expected, sending shares down more than 7%.
It also warned that costs associated with its new contract with the Teamsters union would continue to weigh on the company over the next six months.
As part of that deal, the average full-time driver won a pay and benefits package worth about $170,000 (£135,000) a year.
The 12,000 planned job cuts represent about 2.5% of the company's global workforce, which has already shrunk since the pandemic when a surge in online shopping prompted business to boom.
Executives said most of the positions would be cut from the ranks of its 85,000 management staff, as well as some contractors. Those positions will not return, even as the business mends, executives said.
"It's a change in the way we work," said chief financial officer Brian Newman.
The company is also exploring a potential sale of Coyote, a truck load brokerage business it purchased in 2015, which matches truckers to customers.
This is depressing but not surprising with the economy being the way it is. People don't have the money to spend like they used to and union deal put UPS in a dire situation.
