UPS announces 12,000 job cuts; reports drop in package volume

UPS fell short of Wall Street revenue estimates Tuesday, reporting drops in shipping volume, both internationally and domestically, in its fourth-quarter earnings report. The company also announced 12,000 layoffs as part of an effort to align resources in 2024.

The workforce reductions will save the company about $1 billion in costs, CEO Carol Tomé said on a company earnings call.

“2023 was a unique, and quite candidly, difficult and disappointing year. We experienced declines in volume, revenue and operating profits and all three of our business segments,” Tomé said.

Shares of the package giant dipped nearly 6% in premarket trading.

Here’s how the company performed compared to Wall Street estimates:

• Adjusted earnings: $2.47 vs. $2.46 per share expected, according to LSEG, formerly known as Refinitiv
• Revenue: $24.92 billion vs. $25.43 billion expected

For the last three months of 2023, UPS reported net income of $1.61 billion, or $1.87 per share, compared with $3.45 billion, or $3.96 per share, a year earlier. Adjusting for one-time items related to pensions and intangible assets, UPS earned $2.47 per share.

Revenue declined 7.8% to $24.9 billion from $27 billion last year.

The company reported a 7.4% drop in average daily volume domestically and an 8.3% decrease internationally. UPS said the international decrease was primarily due to “softness in Europe.”

Though the earnings report did not directly mention any financial impacts from negotiations with Teamsters in August over labor contracts, Tomé cited the negotiations and the macroeconomic environment more broadly as contributing to the “disappointing” year.

Looking ahead, UPS’s 2024 outlook expects revenue to range from $92 billion to $94.5 billion, with an adjusted operating margin of about 10% to 10.6%.

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