Jan 30, 2024 - Economy

UPS cutting 12,000 jobs after decline in package volume

A brown truck with a yellow YPS logo

UPS is cutting its workforce by more than 2%. Photo: Mike Kemp/In Pictures via Getty Images

UPS plans to cut 12,000 jobs as the shipping giant grapples with a significant drop in package volume and higher labor costs.

The big picture: The company's revenue declined by 7.8% in the fourth quarter, to $24.9 billion, compared with a year earlier. During that same period, it saw a 7.4% decrease in average daily package volume in the U.S.

Details: The job cuts — which represent about 2.4% of the company's workforce — will primarily affect management and contract positions, CEO Carol Tomé said on an earnings call.

  • The company expects to save about $1 billion on the reductions.

State of play: The job cuts come several months after UPS reached a new labor deal with the Teamsters union to avert a potential strike.

  • The company on Tuesday said that it's still recovering package volume that customers diverted to its competitors ahead of the potential labor stoppage.
  • So far, UPS has recaptured 60% of that lost business, Tomé said.

What they're saying: "We don't expect these jobs to come back," even if package volume increases, CFO Brian Newman said.

  • "We've identified new ways of working," Tomé added.

Of note: UPS plans to require its workers to return to the office five days a week in 2024, Tomé said.

Go deeper: Fully remote work is on the decline in the U.S.

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