UPS to cut 12,000 jobs, citing softer demand and higher labor costs

“It’s a change in the way we work,” chief financial officer Brian Newman told investors. “So as volume returns to the system, we don’t expect these jobs to come back. It’s changing the effective way we operate.”

The company’s business has suffered, logging revenue of $24.9 billion in the fourth quarter of 2023, down 7.8 percent from the same period the year before, with executives citing softer demand.

Chief executive Carol Tomé said in a statement that 2023 “was a unique and difficult year and through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth,”

Executives also pointed to higher labor costs. UPS last summer reached a new deal with the Teamsters that included raises of up to 55 percent over five years for certain workers.

The company’s sales outlook for 2024 also disappointed investors. The company projected revenue between $92 billion and $94.5 billion, an increase of 1 percent to 3.8 percent, but analysts had expected the outlook to be higher, according to news reports referencing financial data provider Refinitiv.

UPS stock was down 7.8 percent by midmorning.

This is a developing story and will be updated.