UPS will cut 12,000 jobs to save money in 2024

UPS revenue declined in Q4 and 2023. The carrier says the planned job cuts will generate $1 billion in savings in 2024.

United Parcel Service Inc. (UPS) will cut 12,000 jobs this year, the carrier announced Jan. 30. That’s part of a plan to generate $1 billion in savings as revenue and package volume decline, CEO Carol Tome said.

UPS consolidated revenue declined 7.8% to $24.9 billion in its fiscal fourth quarter ended Dec. 31. Consolidated operating profit declined 22.5% during the same time period to $2.5 billion. For the full fiscal 2023 year, consolidated revenue declined 9.3% to $91 billion and consolidated operating profit declined 28.7% to $9.1 billion.

2023 was a unique and quite candidly a difficult and disappointing year for UPS. “We experienced declines in volume, revenue, and operating profit in all three of our business segments. Some of this performance was due to the macroenvironment and some of it was due to the disruption associated with our labor contract negotiations as well as higher costs associated with the new contract,” Tome told investors.

Thousands of online retailers worldwide use UPS for their fulfillment either exclusively or in combination with other carriers.

U.S. domestic segment revenue declined 7.3% to $16.9 billion in the quarter. Average daily volume (ADV) ended the quarter 7.4% below 2022 levels. However, that still represented a step up from an “exceptionally low third quarter” that preceded the period, Tome said. Revenue per piece of mail was slightly positive, the carrier said without revealing more.