UPS announced 12,000 layoffs on Tuesday, even as it acknowledged a drop in shipping volume, both international and domestic, in its fourth-quarter earnings report.
The workforce reductions were announced as part of an effort to align resources by 2024, according to CNBC. UPS has approximately 500,000 employees.
CEO Carol Tomé said on the company's earnings call that the cuts will save the company about $1 billion in costs.
DEPARTMENT: UPS, $UPSto cut 12,000 jobs after what its CEO called a “difficult and disappointing” year.
The company has said it is looking to cut $1 billion in annual costs.
UPS shares are down 6% after the announcement.
Over the past 3 months, layoffs have… pic.twitter.com/zA4Laq9FPL
— Kobeissi Letter (@KobeissiLetter) January 30, 2024
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“2023 was a unique, quite frankly, difficult and disappointing year. We experienced declines in volume, revenue and operating profit and all three business segments,” Tomé said, adding: “We will adjust our organization to our strategy and we will align our resources with what is most important.”
UPS reported a 7.4% drop in average daily volume domestically and an 8.3% decrease internationally.
Another event that took place in 2023 was a new 5-year labor agreement with the Teamsters Union that will result in drivers averaging $170,000 in wages and benefits at the end of the agreement.
Tomé touted the deal reached in August, saying at the time, “When you look at total compensation, at the end of the new contract, the average full-time UPS driver will make about $170,000 a year in salary and benefits. And for all part-time union employees already working at UPS, at the end of this contract, they will earn at least $25.75 an hour while receiving full health and pension benefits.”
“We are improving working conditions for all employees, including air conditioning in all cars packaged in the US, starting in January 2024,” he added.
In October 2023, UPS expanded its emergency child care program by providing on-site daycare for its employees if their typical daycare option fails.
As reported by CNBC, UPS reported net income of $1.61 billion, or $1.87 per share, for the final three months of 2023, compared with $3.45 billion, or $3.96 per action, a year earlier.
Here is a sample of responses to X's story:
It explains a lot. @UPS the service has gone down quickly. I literally just had an order of $800 worth of frozen steak that was shipped over 2 days on 1/24 still not arrive as of 1/30. Tracking details blamed bad weather even though it made it to Nashville on time and it was 60 degrees.
— Josh Jarrett (@nohardforks) January 30, 2024
Their service has been terrible. I've had things break without delivery and it's not just the shipping that has gone down.
— Patrick_carey (@PatrickJCarey5) January 30, 2024
Can you imagine busting your kneecaps for years getting in and out of the brown truck, finally getting a living wage, only to be fired a few months later. The sucker that has to go through the roof.
— John Putman II (@putman_ai) January 30, 2024
All these bloated contracts were signed to get your asses off the picket lines and back to work. UAW is next in layoffs and we can all see what an irresponsible liar Shawn Fain is.
— Wülf Aufzug (@wulfaufzug) January 30, 2024
Remember a few months ago when the union demanded $170,000 in non-business salaries? This is the devastating unintended consequence. In the long run, this union negotiation is leaving workers worse off.
Democrats who blindly support every demand of populist union bosses are not pro-workers. https://t.co/eoN7udkpCn
— Ed Tarnowski (@edtarnowski) January 30, 2024
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