UPC to cut 12,000 jobs due to economic downturn

UPS is in the process of cutting 12,000 jobs due to a significant decline in income. This decision comes as the company grapples with a $1.87 billion drop in earnings, marking 2023 as a year of financial setbacks for the logistics giant.

The job cuts will affect positions globally across all levels, with 75% expected to be executed within the first half of the year. The economic pressures companies are facing, including increased union labor costs and a decrease in demand for package deliveries, are contributing to these job cuts.

UPS plans to layoff 12,000 employees. 😢 pic.com/G0V3IXuxhf

— SAY CHEESE! 👄🧀 (@SaycheeseDGTL) January 30, 2024

UPS’s financial difficulties were further exacerbated by a near-miss strike last year, which led to a $30 billion agreement with the Teamsters union, representing 340,000 workers. This deal prevented a strike but also caused a substantial increase in labor expenses.

Due to the threat of the strike, customers turned to competitors such as FedEx and Amazon, resulting in a slow recovery for UPS. Despite regaining approximately 60% of the business lost during that period, the company’s projections for global revenue in 2024 remain below analysts’ expectations.

Just Months After “Massive Labor Deal,” UPS Announces Massive Layoffs https.com/TBQRE7Wzje

— zerohedge (@zerohedge) January 30, 2024

The company’s financial strain was further compounded by labor contract-related costs, exceeding the company’s estimates by about $500 million in the second half of 2023. This has led to an adjusted profit fall and a clear indication from the CFO that the nature of work at UPS is changing, suggesting that even as volumes recover, the eliminated jobs may not return.

Amid these challenges, UPS is focusing on efficiency and cost management to adapt and restructure for the future. In an increasingly competitive and unpredictable market, the company recognizes the importance of lean operations for survival.

These job cuts at UPS highlight the delicate balance between labor costs and operational sustainability, shaping the industry for years to come as businesses adapt to a rapidly changing economic landscape.