UPS is to lay off roughly 12,000 employees following a large year-over-year sales loss, company officials announced on Tuesday morning.
The personnel cut is part of an effort to synchronize resources in 2024 and will save the Atlanta-based company roughly $1 billion, according to CEO Carole Tomé during a corporate earnings call.
“I want to thank UPSers for providing the best on-time performance of any carrier for the sixth year in a row,” Tomé said in a corporate statement posted on Tuesday. “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.”
UPS Director of Financial and Strategic Communications, Brian Hughes, confirmed the layoffs to reporters.
“In 2023, dynamic external and economic conditions led to lower volume and a more than $9 billion decline in revenue year over year,” Hughes wrote in a letter to the editor.
As a result, Hughes stated that the business intends to ‘right-size’ its global workforce and cut around 12,000 jobs over the next few months, with 75% of the reductions occurring in the first half of 2024.
He would not specify which roles would be terminated.
“It’s important to note that the reduction of less than 3% of our workforce has no impact on union-represented roles,” Hughes said, noting that most drivers are union members. “However, we continue to align staffing in our operations to the needs of our business.”
Hughes stated that the company will provide support to all affected employees, including severance compensation and outplacement services.
UPS had over 500,000 employees across 200 countries and territories as of Tuesday, as reported on their website.
UPS reported fourth-quarter 2023 consolidated revenues of $24.9 billion, a 7.8% reduction from the fourth quarter of 2022.
“Consolidated operating profit was $2.5 billion, down 22.5% compared to the fourth quarter of 2022, and down 27.1% on an adjusted basis,” according to the company’s press release. “Diluted earnings per share were $1.87 for the quarter, with adjusted diluted earnings per share of $2.47, 31.8% lower than the same time in 2022.