UPS cuts 12,000 jobs worldwide after post-pandemic losses
United Parcel Service Inc. (UPS), announced it will slash 12,000 jobs worldwide due to subdued demand and escalating union labour costs.
The announcement was made by UPS Chief Executive Officer Carol Tomé during an earnings conference call on Tuesday. Tomé stated: "2023 was a unique and difficult year. Through it all, we remained focused on controlling what we could control, stayed on strategy, and strengthened our foundation for future growth."
The move is expected to save the package delivery giant approximately $1 billion. The company lost business as people shop more at physical stores post-pandemic, while disruptions were also caused by union negotiations last summer, as well as the impact of inflation on sales.
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The job cuts are expected to save the package delivery giant approximately $1 billion (Getty Images)Tome also announced that UPS employees will return to the office five days a week this year. UPS shares saw a dip of approximately 7% in early trading following the announcement.
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In a statement released by the company Tuesday, Tomé said: "I want to thank UPSers for providing the best on-time performance of any carrier for the sixth year in a row. 2023 was a unique and difficult year and through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth."
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The company noted: "Consolidated operating profit was $2.5 billion, down 22.5% compared to the fourth quarter of 2022, and down 27.1% on an adjusted basis. Diluted earnings per share were $1.87 for the quarter; adjusted diluted earnings per share of $2.47 were 31.8% below the same period in 2022."
The restructuring comes amidst a broader trend of layoffs in major corporations, with industry giants such as Amazon, eBay, Google, TikTok, and Twitch having already announced workforce reductions this year. Macy's recently disclosed its plans to cut 2,000 jobs and shutter 5 stores, while Wayfair implemented a 13% reduction in its global workforce.
UPS, a global logistics behemoth with around 500,000 employees across more than 200 countries, is eyeing a renewed focus on operational efficiency and the pursuit of higher-profit segments, with the company's 2024 outlook expecting revenue ranging from $92 billion to $94.5 billion.
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