UPS has announced a significant workforce reduction of 12,000 jobs due to challenges faced in 2023, including economic softness and labor disputes.
CEO Carol Tomé characterized the past year as “difficult and disappointing” and emphasized the company’s focus on efficiency through investment in artificial intelligence (AI).
Additionally, UPS plans to bring employees back to the office full-time.
The job cuts aim to save $1 billion in costs this year, with most coming from management and contractor positions.
Tomé highlighted the changing nature of work, stating, “It’s a change in the way we work.”
Despite expectations for modest growth and a return of some lost business, UPS’s forecast fell short of analyst expectations, leading to a more than 7% drop in shares.
The company also faces ongoing costs from a new contract with the Teamsters union.
In addition to workforce reductions, UPS is exploring the potential sale of its Coyote truck load brokerage business.
Tomé expressed optimism about future productivity enhancements, citing advancements in technology, particularly in generative AI.
Concerns about shipping disruptions due to conflicts in the Red Sea and drought in the Panama Canal were also mentioned.
UPS, known for handling millions of packages daily, remains focused on adapting to evolving challenges and leveraging technology for growth opportunities.
Source-BBC
