UPS Announces 12,000 Job Cuts in Major Restructuring
Global delivery giant UPS will lay off 12,000 employees this year in a cost-cutting drive aimed at saving $1 billion. The announcement, made by CEO Carol Tomé, follows a significant revenue decline in 2023.
Key Takeaways
- 12,000 jobs will be eliminated, primarily affecting management roles.
- The move is projected to save the company $1 billion in costs.
- UPS reported a 9.3% drop in annual revenue for 2023.
- Company shares fell 8% following the announcement.
Financial Performance and Strategy
UPS faced a challenging 2023, with fourth-quarter revenue falling 7.8% to $24.9 billion. Full-year revenue stood at $91 billion, a 9.3% decrease from the previous year.
“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,” Tomé said in a statement.
Despite the downturn, Tomé credited employees for maintaining industry-leading on-time performance.
“I want to thank UPSers for providing the best on-time performance of any carrier for the sixth year in a row. That’s a direct result of the agility and commitment of our team. Looking to 2024, we will build on these strengths and lean into our ‘better and bolder’ strategy,” she added.
Who Will Be Impacted?
The layoffs will affect both full-time and part-time management positions. Seventy-five percent of the cuts are scheduled for the first half of 2024. The company is also reviewing strategic options for its Coyote truckload brokerage business.
“We are going to fit our organisation to our strategy and align our resources against what’s wildly important,” Tomé said.
Outlook for 2024
UPS has provided a revenue forecast of $92 billion to $94.5 billion for 2024. The market reacted negatively to the restructuring news, with the company’s stock price dropping 8% on Tuesday.
