United Parcel Service Inc. is slashing 12,000 jobs worldwide in an economic belt-tightening move, the Atlanta-based global shipping giant announced on Tuesday. UPS CEO Carol Tomé revealed during an earnings conference call that these cuts are part of a strategy to contend with lower demand and higher labor costs after a challenging 2023. "2023 was a unique and difficult year," Tomé stated in comments reported by FOX 5 Atlanta. Focusing on the future, Tomé explained, "Through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth."
The plan to streamline operations will entail cutting management positions and contractors, a strategy aimed at generating about $1 billion in savings for the shipping behemoth. UPS witnessed a drop in client engagement amid tense union negotiations last summer, compounded by a noticeable shift back to in-store shopping post-pandemic and impediments from inflation. Even as layoffs unfold, Tomé affirmed the company's commitment to efficiency and a pivot toward more lucrative deliveries like medical supplies. Spurring efficiency in motion, the average daily volume saw a critical dip of 7.4% in the U.S. and 8.3% internationally, leading the drastic steps reported by WSB-TV.
Local economists are downplaying the potential economic tremors of the layoffs within Georgia's borders. According to FOX 5 Atlanta, Roger Tutterow from Kennesaw State University and Tom Smith from Emory University's Goizueta Business School, don't see the job cuts as cataclysmic for Georgia's economy. "Relative to the size of the Georgia economy or the Atlanta economy, they’re not going to be catastrophic," said Tutterow, emphasizing the global scale of the reductions.
The financial sting for UPS is part of a broader trend of layoffs across multiple large corporations. Big names like Amazon, eBay, Google, TikTok, Macy's, and Wayfair have already marked the start of the year with job cut announcements. UPS caps this trend, with the company issuing a statement noting a fall in revenue by more than $9 billion year over year and announcing the job cut plans to align its global staffing. "In 2023, dynamic external and economic conditions led to lower volume," UPS detailed in the statement obtained by FOX 5 Atlanta, emphasizing the proactive measures the company is putting forth. Despite the gloomy layoff news, UPS is projecting its 2024 revenue to fall somewhere between $92 billion and $94.5 billion, hoping the strategic cuts will countenance a leaner road ahead.
