United Parcel Service will slash 12,000 jobs and workers who survive the massive layoffs will be ordered to return to the office five days a week, the company said Tuesday.
The Atlanta-based firm announced the job cuts after reporting a 31.8% drop in quarterly profit, as e-commerce demand remained subdued and costs jumped from the company’s new contract with the Teamsters union.
UPS CEO Carol Tomé told analysts on an earnings call that the layoffs — which will impact about 14% of 85,000 full- and part-time managers — are expected to save the delivery giant $1 billion, according to Bloomberg.
The Post has sought comment from UPS.
Tome also said that beginning in March, the shipping giant will eliminate its hybrid work schedule and require workers to return to the office five days.
“We are going to fit our organization to our strategy and align our resources against what’s wildly important,” Tomé said on the earnings call.
The changes come after UPS had a “unique and difficult” 2023, Tomé added.
For the third quarter ended Dec. 31, UPS has revenue of $24.9 billion — below analysts’ estimates of $25.4 billion estimates and 7.8% less than the year-ago period.
Adjusted fourth-quarter earnings were $2.47 a share, down 32% from a year earlier, the company said.
For the full 2023 fiscal year, revenue was $91 billion, a 9.3% decrease from 2022, UPS said.
For 2024, UPS expects to be squeezed by the effects of its five-year labor deal with the Teamsters that took effect in August, which will see part-time workers receiving a 48% average total wage bump by the end of the contract.
This year, UPS expects its sales to come in between $92 billion and $94.5 billion, which misses the $95.7 billion midpoint of estimates from 30 analysts surveyed by Bloomberg News.
UPS’s share price tumbled 8%, to $144.91, in after the poor earnings report.
Tomé said she plans to lay out long-term goals in an investor meeting in March, Bloomberg reported.
UPS is mulling the sale of its Coyote truck brokerage business, which has seen sales plummet because of a freight recession marked by declining rates and over capacity, Bloomberg reported.
UPS has cut back on flights as air freight demand has slowed, especially from China, per Bloomberg.
It’s unclear whether air cargo business will pick up in the coming weeks because of shipping disruptions in the Suez Canal caused by attacks from Yemen-backed Houthi rebels, which has spiked shipping costs as much as 600%.