With 2023 being a particularly tough year for United Parcel Service (UPS), the multinational shipping company has decided to cut 12,000 jobs. This round of layoffs is expected to help the US-headquartered supply chain management firm save about one billion dollars this year.
Carol Tome, CEO, UPS, has also revealed the company’s intention to sell its Coyote truck-brokerage business in a bid to cut costs amidst a demand slowdown and labour expenses. However, the company managed to stay afloat and focus on its strategy to secure its future and ensure the foundation remains strong for growth.
Shares of the company fell 7.6 per cent. Its annual sales dipped 9.3 per cent, and the company expects an improvement in 2024 of just over one per cent. Delivery volumes fell 7.5 per cent in Q4 due to the slow demand in Europe and the US. Profits will not see much increase because the new labour deal that came into effect in August will prove to be expensive. UPS expects sales for 2024 to be in the range of $92 billion to $94.5 billion.
The shipping company is now working to recover the business that was lost when people preferred to shop from physical stores after pandemic-related restrictions were lifted. Inflation only added to the company’s woes as consumers lost purchasing power.
The firm hopes to concentrate more on delivery of medical supplies, which is expected to bring in more profits.
This year, UPS expects its employees to return to office for five days a week.
