UPS, a major player in the shipping industry, announced plans to lay off 12,000 workers to cut costs amid declining parcel volumes. The workforce reduction, which is expected to save an estimated $1 billion, was revealed during an earnings call on Tuesday.
Notable cuts: These cuts, primarily impacting management and contract roles, represent a major shift as the company adapts to a softer shipping market, particularly in Europe.
- The layoffs represent about 2.4% of UPS's global workforce of nearly half a million employees.
- CEO Carol Tomé cited both the economic landscape and a disappointing volume decrease as factors behind the decision.
Dropping figures: UPS's revenue in Q4 of 2023 dipped to $24.9 billion, a 7.8% decrease from the previous year's quarter, marking a significant drop in package handling domestically and abroad.
Strategic shifts: Apart from layoffs, UPS is contemplating the sale of the Coyote truck brokerage unit, viewed as a volatile earnings contributor.
Financial outlook: Looking ahead into 2024, with expected revenues between $92 billion and $94.5 billion, UPS aims for an adjusted operating margin of roughly 10% to 10.6%.
Despite these challenges, UPS's leadership continues to project confidence in the company's resilience and long-term strategy.