UPS to lay off 12,000 workers, citing changes in operation that affect jobs of managers, contractors

United Parcel Service said Tuesday that it will lay off about 12,000 workers, with managers and contractors taking the brunt of the cuts.

UPS has about 500,000 employees globally, with around 85,000 managers. 

The company said the layoffs, which comprise 2.4% of its workforce, reflect a changing UPS.

“It’s a change in the way we work. So as volume returns to the system, we don’t expect these jobs to come back,” UPS CFO Brian Newman told investors on a conference call. “It’s changing the effective way that we operate.”

The company is making the cuts to try to recoup nearly $1 billion in losses from 2023 when thousands of customers switched to rival FedEx after the Teamsters union threatened to strike. 

The company said it expects 2024 global revenue to sit somewhere between $92 billion and $94 billion, up from 2023’s $91 billion — which was a 9% drop from 2022 — but short of analysts’ expectations of $95 billion.

The threat of the Teamsters strike was flagged as the culprit for slowed revenue last year. However, the company said it has already clawed back about 60% of its lost business from 2023. 

The layoffs come about five months after the company reached a contract with the Teamsters union, which represents about 300,000 UPS workers. The union won several concessions from the company including significant pay raises and improvements to benefits and working conditions.