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UPS announces 12,000 job cuts in a drive for profitability
https://www.whatjobs.com/news/usa/us-employment-news/ups-announces-12000-job-cuts-in-a-drive-for-profitability
By Nithya Bose in Business News, posted January 31, 2024
UPS has plans to axe 12,000 jobs this year to push profitability amid a business slowdown.
The layoffs primarily affect its global management and contract staff.
With around 85,000 management employees, the firm said these roles may not be reinstated even if business conditions improve.
This reduction will not impact unionized package handling and transportation workers, who form most of UPS's 495,000-strong workforce.
The move reflects a broader trend among US companies to streamline operations, cut costs, and accelerate decision-making processes.
Like other firms, including Alphabet, Salesforce, and Wayfair, UPS focuses on reducing its white-collar workforce, having previously offered buyouts.
The company is also increasing its utilization of artificial intelligence and machine-learning tools.
CEO Carol Tomé said: “Here we’ve identified new ways of working and are calling this ‘Fit to Serve.’ ”
He labeled 2023 as a "challenging and disappointing year."
The company faces increased costs due to wage hikes in union contracts, high competition from smaller carriers, and lower parcel volumes compared to the pandemic peak.
Additionally, UPS is joining other companies in mandating a five-day office workweek starting March 4.
This policy change follows contentious labor negotiations last year, highlighting disparities between in-person and remote working conditions.
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Despite these challenges, UPS maintains a workforce size similar to pre-pandemic levels and expects modest growth in US small-package volumes.
The company's shift towards automation and AI is part of a broader trend in reducing reliance on human labor for data analysis and decision-making.
UPS plans to detail its productivity improvement strategies at a March 26 investor event.
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