US parcel service: UPS cuts 12,000 jobs

US parcel service: UPS cuts 12,000 jobs

Falling shipment volumes and failure to achieve sales targets are forcing UPS to cut jobs.

The US parcel service UPS wants to cut 12,000 jobs due to difficult business. The job cuts are intended to save a billion dollars (around 920 million euros), as CEO Carol Tomé said in a telephone conference. That’s around two and a half percent of the global workforce of around half a million employees.

In addition, the truck logistics company Coyote, which UPS only bought in 2015, is being put to the test. It is also possible to sell the subsidiary, which is suffering from the sharp decline in transport prices after the Corona boom.

Last year, UPS also missed its sales target, which had been lowered several times, due to lower shipment volumes. In addition, significant wage increases for employees weighed on profits. According to the statement, CEO Tomé only expects a slight increase in sales to around $92 to $94.5 billion in 2024.

Last year, UPS sales fell by a good nine percent to $91 billion. Adjusted operating profit fell by almost 29 percent to $9.9 billion. The bottom line is that UPS earned $6.7 billion, around 42 percent less than in the previous year.

A slight increase in average revenue per package could not compensate for the decline in shipment volumes. On the one hand, high inflation and economic uncertainty weighed on consumers’ spending mood. On the other hand, many customers temporarily relied more on competitors such as Fedex and DHL because UPS was threatened with a strike. Ultimately, the company reached an agreement with the Teamsters transport workers union on salary increases.

Source: Stern

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