Global logistics giant UPS has announced its decision to cut 12,000 jobs or 2.4% of its extensive 500,000-strong global workforce.
The decision comes as UPS seeks to achieve $1 billion in cost reductions, citing subdued demand and rising union labor expenses, as stated during its earnings call on Tuesday.
CEO Carol Tomé acknowledged the challenges faced in 2023, emphasizing the company’s commitment to focusing on controllable factors and fortifying its groundwork for future growth despite the adversities.
A UPS spokesperson clarified that the job cuts would impact less than 3% of the company’s total workforce and would not affect union-represented roles.
The reductions are expected to span across various regions and functions within UPS, with 75% of the cuts anticipated to occur within the first half of the year.
UPS’s fourth-quarter revenues for 2023 amounted to $24.92 billion, falling short of Wall Street analysts’ expectations of $25.43 billion.
Consequently, UPS shares experienced a decline of over 8% in Tuesday’s trading session.
The decision follows UPS’s agreement with the Teamsters union last July, which saw adjustments to the pay structure for both full-time and part-time workers.
This move is part of UPS’s broader strategy to streamline operations and navigate evolving market dynamics while maintaining its commitment to financial prudence and sustainability.