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UPS Exceeds Earnings Expectations, Announces Deeper Job Cuts in Strategic Overhaul
[City, State] – October 28, 2024 – Delivery giant UPS reported stronger-than-anticipated earnings on Tuesday, alongside a significant increase in job reductions as the company continues its ambitious business turnaround.
United Parcel Service revealed that its workforce has been reduced by approximately 34,000 jobs this year, surpassing its initial estimate of 20,000. This includes the elimination of around 14,000 corporate and management positions.
“We are executing the most significant strategic shift in our company’s history, and the changes we are implementing are designed to deliver long-term value for all stakeholders,” stated UPS CEO Carol Tomé. The company confirmed to CNBC that these cuts are already underway.
Despite the workforce adjustments, Tomé expressed confidence in the company’s preparedness for the upcoming holiday shipping season. “With the holiday shipping season quickly approaching, the 118-year-old UPS is positioned to run the most efficient peak in our history while providing industry-leading service to our customers for the eighth consecutive year,” she added.
Following the announcement, UPS shares saw an approximately 8% rise in early morning trading on Wall Street.
The Georgia-headquartered company initially aimed to close around 70 facilities. However, a more extensive restructuring has led to the closure of 93 leased or owned buildings in the first nine months of this year.
Earlier this summer, UPS offered buyouts to full-time drivers as part of its “largest network reconfiguration” in company history. These strategic changes have reportedly yielded substantial savings, with officials reporting $2.2 billion saved by the end of the third quarter and an estimated $3.5 billion in total year-over-year savings for the current year.
Looking ahead, the UPS chief also indicated plans to integrate artificial intelligence into the company’s daily operations. Tomé acknowledged the complexities of the past quarter, stating, “The third quarter brought a wave of tariff changes, some expected, others unforeseen, and our team navigated these complexities with exceptional skills and resilience.”