UPS Announces Layoffs of 12,000 Workers Amid Revenue Challenges

United Parcel Service (UPS), a global leader in logistics, has announced a significant downsizing of its workforce. The company is set to lay off approximately 12,000 employees, which equates to about 2.4% of its 500,000-strong global workforce. This decision comes as UPS grapples with a noticeable decline in revenue alongside the mounting costs of labor.

Reasons Behind the Layoffs

UPS reported a staggering $9 billion drop in year-over-year revenues. Contributing to the company's financial strain is a hefty $30 billion contract with the Teamsters Union that was ratified last July. These economic pressures have led UPS to take measures to streamline its operations.

Effects on the Workforce

Employees affected by the layoffs can expect to receive severance packages and assistance with finding new employment opportunities. UPS is taking steps to reduce the impact on those who will be parting with the company.

Financial Cutbacks and Market Response

In an effort to mitigate financial setbacks, UPS announced on an earnings call that it aims to slash $1 billion in costs during the fourth quarter. Despite attaining revenues of $24.92 billion, the figure fell short of market expectations, prompting a more than 6% drop in UPS shares during Tuesday trading.

layoffs, revenue, costs