UPS announced the layoff of 12,000 employees Tuesday, while acknowledging drops in shipping volume, both internationally and domestically, in its fourth-quarter earnings report.
The workforce reductions were announced as part of an effort to align resources in 2024, according to CNBC. UPS has roughly 500,000 employees.
CEO Carol Tomé said on a company earnings call that the cuts will save the company about $1 billion in costs.
BREAKING: UPS, $UPS, to cut 12,000 jobs after what its CEO called a “difficult and disappointing” year.
The company has stated that they are looking to cut $1 billion of annual costs.
UPS stock is currently down 6% after the announcement.
Over the last 3 months, layoffs have… pic.twitter.com/zA4Laq9FPL
— The Kobeissi Letter (@KobeissiLetter) January 30, 2024
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“2023 was a unique, and quite candidly, difficult and disappointing year. We experienced declines in volume, revenue and operating profits and all three of our business segments,” Tomé said, adding, “We are going to fit our organization to our strategy and align our resources against what’s wildly important.”
UPS reported a 7.4% drop in average daily volume domestically and an 8.3% decrease internationally.
Another occurrence 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 pay and benefits by the end of the deal.
Tomé touted the agreement reached in August, saying at the time, “When you look at total compensation, by the end of the new contract, the average UPS full-time driver will make about $170,000 annually in pay and benefits. And for all part-time union employees that are already working at UPS, by the end of this contract, they will be making at least $25.75 per hour while receiving full health care and pension benefits.”
“We will be improving the working conditions for all employees, including air conditioning in every new U.S. packaged car, starting in January 2024,” she added.
In October 2023, UPS expanded its emergency childcare program providing on-site day care for its employees if their typical childcare option falls through.
As CNBC reported, UPS reported net income of $1.61 billion, or $1.87 per share, for the last three months of 2023, compared with $3.45 billion, or $3.96 per share, a year earlier.
Here’s a sampling of responses to the story from X:
Explains a lot. @UPS service has gone downhill fast. Literally just had a frozen steak order worth $800 that was shipped 2-day on 1/24 still not get here as of 1/30. The tracking details blamed severe weather even though it arrived in Nashville on time and was 60 degrees.
— Josh Jarrett (@nohardforks) January 30, 2024
Their service has been terrible. I’ve had stuff that’s gotten broken not delivered and it’s not just the shipping is down.
— Patrick_carey (@PatrickJCarey5) January 30, 2024
Can you imagine breaking your kneecaps for years getting in and out of the brown truck, to finally get a decent salary, only to be laid off a few months later. The suck on that has got to be through the roof.
— John Putman II (@putman_ai) January 30, 2024
All these bloated contracts were signed to get their asses off picket lines and back to work. UAW is next for layoffs and we all get to see what a feckless liar Shawn Fain is.
— Wülf Aufzug (@wulfaufzug) January 30, 2024
Remember a few months ago when the union demanded non-market $170K salaries? This is the devastating unintended consequence. In the long run, this union negotiation is leaving workers worse off.
Democrats blindly supporting every populist union boss demand is not pro-worker. https://t.co/eoN7udkpCn
— Ed Tarnowski (@edtarnowski) January 30, 2024
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Tom Tillison grew up in Maryland before moving to Central Florida as a young teen. It is in the Sunshine State that he honed both his passion for politics and his writing skills. Tillison also contributes to BizPac Review.
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