UPS to Cut 12,000 Jobs in Cost-Saving Measure

UPS announced on Tuesday its plans to reduce its workforce by 12,000 employees in an effort to save $1 billion in costs. The majority of the job cuts will affect managers and contractors.

Disappointing Sales Outlook

These job cuts come as UPS released a less-than-optimistic sales outlook for the current year. The company expects global revenue to range between $92 billion and $94.5 billion, a slight increase from the $91 billion reported in 2023. However, analysts surveyed by Refinitiv had anticipated revenue of at least $95.6 billion.

Loss of Business and Recovery Efforts

Last year, UPS experienced a decline in business as customers, concerned about a potential strike by the Teamsters, shifted their shipments to rival carriers like FedEx. While UPS anticipates regaining most of this lost business, it has only managed to win back approximately 60% so far.

Workforce Composition

Currently, UPS employs around 85,000 managers globally out of its nearly 500,000-strong workforce. Additionally, it has over 300,000 hourly US workers who are represented by the Teamsters union.

Changing Operational Approach

CFO Brian Newman explained that these job cuts signify a shift in the company’s operational strategy. As volume returns to the system, UPS does not anticipate rehiring for these positions. This change aims to improve the efficiency and effectiveness of their operations.

(The-CNN-Wire & 2023 Cable News Network, Inc., a Time Warner Company. All rights reserved.)