A massive delivery company now to lay off 12K employees, part of a plan to save $1 billion in costs due to weak demand.
UPS plans to cut roughly 12,000 jobs in 2024 as the delivery giant navigates a soft demand environment, executives said on the company’s Q4 earnings call Tuesday.
The company currently employs about 495,000 people.
The headcount reductions will primarily target management-level employees, of which UPS has 85,000, and contracted positions, CEO Carol Tomé said.
CFO Brian Newman said 75% of the reductions will occur in the first half of the year.
“It’s a change in the way we work,” he said.
“So as volume returns to the system, we don’t expect these jobs to come back. It’s changing the effective way that we operate.”
Delivery demand has plummeted since the heights of the COVID-19 pandemic, and the fourth quarter proved no different for UPS, Supply Chain Dive reports.
The company’s revenue fell 7.8% year over year, while average daily volume in its U.S. segment declined by 7.4%, according to a news release.
It’s a reality that parcel carriers have been adjusting to for several quarters through layoffs and operational adjustments to minimize expenses.
UPS’ current headcount is down by about 45,000 employees from 2021, and rival FedEx has also been cutting jobs.
FedEx’s U.S. headcount declined by about 29,000 in fiscal year 2023, President and CEO Raj Subramaniam said on a June earnings call.
The U.S. small package market isn’t slated to bounce back in 2024 — UPS is expecting it to grow by less than 1% when excluding Amazon’s outsized delivery activity, Tomé said.
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Also Read: A Massive Clothing Retailer Will Now Lay Off 357 Employees
Other Economy News Today
A Texas trucking company now files an unexpected bankruptcy during a time where America already has a shortage of drivers.
“More than 80,000 drivers are needed to make up a shortage in America this year.
And unfortunately, this problem doesn’t look like it will be solved anytime soon.
It is believed that by the year 2030, there will be a shortage of 160,000 truck drivers,” the American Journal of Transportation (AJOT) reported.
J.J. & Sons Logistics, which operates as JJ Transport, has now filed for Chapter 7 bankruptcy liquidation, “four days before a wrongful death civil trial filed by the family of one of its former drivers who drowned in 2016 was slated to start in El Paso County, Texas,” FreightWaves reported.
The company has been operating since 2000.
The company had employed 19 drivers using 18 trucks.
Its website, which is still up, shared the following description of the company:
“Fast and friendly, we offer professional services throughout the Southwest area. Our team of pros is up for any job, from big to small.
Customers know that we stand behind our work, putting your satisfaction as our #1 priority.
What really makes us stand out is our dedication, great prices, and attention to detail.”
In its bankruptcy filing, JJ Transport reported that its assets were $500,000 while it reported liabilities between a whopping $100 million and $500 million.
It’s not just the United States that has a shortage of truck drivers.
The International Road Transport Union’s 2023 driver shortage report found more than three million truck driver jobs are unfilled, or 7% of total positions, in 36 countries studied, reports TheStreet.
“With the huge gap between young and old drivers growing, it will get much worse over the next five years without significant action,” the IRU reported.
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Also Read: A Massive Furniture Company Now Lays Off 1,650 Employees
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