UPS is cutting 12,000 jobs | CNN
In a recent announcement, UPS, the global shipping giant, revealed its plans to cut 12,000 jobs to reduce costs by a whopping $1 billion. Most of these job cuts will affect managerial and contractor positions within the company. This move comes on the heels of UPS issuing a less-than-rosy sales outlook for the current year, projecting global revenue between $92 billion and $94.5 billion. While this is an increase from the $91 billion in revenue reported for the previous year, it falls short of analysts’ expectations, who were anticipating revenue of at least $95.6 billion.
The reasons behind UPS’s challenging financial situation can be traced back to events like the shift of business to rival carriers, such as FedEx, by customers concerned about a potential Teamsters strike. Although UPS aims to regain most of that lost business, it has only won back about 60% so far. The company’s fortunes had soared during the initial years of the pandemic, with online shopping reaching unprecedented heights, leading to UPS achieving sales of over $100 billion for the first time in 2022. However, CEO Carol Tome described the sudden drop in revenue by over 9% in 2023 and the gloomy outlook for the near future as “difficult and disappointing” by CEO Carol Tome.
UPS’s challenges also stem from macroeconomic factors, disruptions associated with labor contract negotiations, and increased costs related to the new contract. As a result, UPS’s stock took a 7% hit following the announcement of these job cuts. The company had previously reduced its employee headcount through attrition. It reduced flying hours, but with a forecast of minimal growth in the US small package market and rising union wage rates, it is now turning to trimming its salaried staff as a significant cost-cutting measure………
[read more]
Rising Dough
In light of UPS’s recent struggles and cost-cutting measures, how do you think these changes will impact the company’s ability to compete in the increasingly dynamic world of package delivery? When responding, consider the intricate connections between business decisions, workforce management, and market conditions.
*Click on the “Full Loaf” icon to read the full article! After you read the full article, let us know your thoughts.
Share this content:
Them losing more employees will cause packages to be delivered at a much later date then what they already receive them. They could also use this as a money-making strategy by having costumers pay more for even quicker delivery.