UPS Announces Significant Workforce Reductions Amid Profit Declines

Strategic Insights -

As part of its cost-cutting efforts, Atlanta-based delivery company UPS has revealed that it has reduced its workforce by 48,000 employees since last year, with 34,000 of those cuts affecting drivers and warehouse workers in the United States. This strategic shift is aimed at bolstering profits and winning back investors, as the company's stock price has long lagged the wider stock market. The workforce reductions are expected to deliver long-term value for all stakeholders, according to UPS's chief executive Carol Tomé.

Key Takeaways:

  • The majority of the layoffs, approximately 70%, affected drivers and warehouse workers, with the remaining 30% coming from management ranks.
  • UPS has reduced its workforce by 48,000 employees since last year, with 34,000 of those cuts occurring this year among drivers and warehouse workers in the United States.
  • The company reported net income of $1.3 billion in the third quarter, down from $1.5 billion a year earlier.
  • Revenue totaled $21.4 billion in the third quarter, a decline from $22.2 billion last year.
  • UPS executives pointed to improvements in revenue per package in the United States, which grew 10% in the third quarter from a year earlier.
  • The company has been impacted by the imposition of tariffs this year, with the volume of packages sent to the United States from China falling nearly 30% in the third quarter.
  • UPS has reduced its Amazon parcel delivery business, delivering 21% fewer Amazon parcels in the third quarter compared to last year.

Statistics:

  • 70% of the layoffs affected drivers and warehouse workers.
  • 48,000 employees were reduced from the workforce since last year.
  • 34,000 positions were cut among drivers and warehouse workers this year.
  • 14,000 employees were cut from management ranks began last year.
  • UPS reported net income of $1.3 billion in the third quarter.
  • Revenue totaled $21.4 billion in the third quarter.
  • Revenue per package in the United States grew 10% in the third quarter.
  • The volume of packages sent to the United States from China fell nearly 30% in the third quarter.
  • UPS delivered 21% fewer Amazon parcels in the third quarter compared to last year.

Sources:

  • "UPS lays off 48,000 amid loss of $1.5 billion; breathes life into its stock price", cnbc.com
  • "UPS just cut 14,000 jobs, and says it will 'deliver long-term value for all stakeholders'", Washingtonpost.com
  • News release from UPS announcing workforce reductions
  • US Customs and Border Protection data on packages entering the United States
  • The New York Times article, "UPS Lays Off 48,000 Workers in Bid to Save Money"