UPS, one of the world’s largest shipping companies, has announced plans to lay off 12,000 employees as part of a cost-cutting strategy. The company, led by CEO Carol Tomé, said the job cuts will help save $1 billion this year.
The decision to reduce headcount comes after the company reported declining revenues in its three business divisions, as well as a drop in demand and increased competition from large e-commerce companies. UPS reported fourth-quarter 2023 net income of $1.61 billion, down significantly from the $3.45 billion reported in the same period last year.
Most of the layoffs will be in the Management division, which employs about 85,000 people. UPS plans to implement new technologies, such as artificial intelligence, to optimize its operations, which has led to the need for job cuts.
Investors responded to UPS’s announcement with a drop in stock prices, highlighting the challenges the company faces in adapting to a rapidly changing industry. UPS, the company that employs nearly 500,000 workers worldwide, will also ask its employees to return to a five-day work week in 2024.
This news comes as a major blow to the company’s workforce and the impact for those affected could be devastating. The decision also raises questions about the future of UPS and its overall strategy. As the company turns to technology to drive efficiency and reduce costs, the future of human jobs within the company becomes uncertain.
With information from EFE
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