UPS says it will cut 12,000 jobs following a disappointing sales outlook for the year. The layoffs come just five months after the company reached a major union deal.
The job cuts will help the company save $1 billion in costs, CEO Carol Tome said in a call Tuesday morning. Manager and contract roles will be the most impacted.
Labor negotiations last year threatened to disrupt package deliveries for millions of customers, before a deal with Teamsters was reached. As consumers feared potential strikes, they took their business to rival companies, like FedEx. UPS expects to gain most of that business back, but so far has only won back 60% of it, according to CNN.
UPS expects its revenue for 2024 to fall between $92 billion and $94.5 billion, falling short of Wall Street’s expectations of a figure above $95 billion.
In 2022, UPS topped $100 billion in sales for the first time in company history. Tome called it "disappointing" that the same benchmark won’t be reached again anytime soon.
UPS also suggested that its Coyote truck load brokerage business might be put up for sale.
The company is also requiring employees to return to the office five days per week this year.
UPS shares dropped nearly 9% on Tuesday.
UPS has about 85,000 managers in its workforce of nearly 500,000 employees worldwide. It has over 300,000 hourly workers in the U.S. represented by the Teamsters union.
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