UPS cuts 12,000 jobs disappointing

CEO Carol Tomé said 2023 was a difficult and disappointing year and the company is investing in artificial intelligence (AI) to make its operations more efficient. He also invited employees back to the office five days a week. The job cuts are expected to cut costs by $1bn (£790m) this year. UPS, whose operations are seen as an indicator of the health of the broader economy, struggled last year with falling sales and profits as the number of packages the company handled fell. The company says this reflects economic weakness in Europe and parts of Asia, as well as disruptions in the United States, where a threatened staff strike over the summer prompted some customers to take business to competitors. UPS said it had recovered about 60% of that business and expected modest growth to resume this year. Average daily volume was flat in the US, or up 2%, and 3% internationally. But its forecast was weaker than analysts expected, sending shares down more than 7%.He also warned that costs related to the new contract with the Teamsters Union will continue to burden the company for the next six months. As part of the deal, the average full-time driver won a salary and benefits package worth about $170,000 (£135,000) a year when the five-year contract expires in 2028.The planned cut of 12,000 jobs means about 25%. of the company and its global workforce, which has already shrunk since the pandemic, as the rise of online shopping boosted business. Executives said most of the 85,000 management jobs would be lost, as well as some contractors. Those seats won’t return even if the company makes repairs, executives said there is a change in the way we work, ; said CFO Brian Newman. The company is also exploring a possible sale of Coyote, a truck brokerage firm that connects truckers with customers, which it bought in 2015.Tomé said the company sees many opportunities to increase productivity in the coming years. Technology has changed so much in the last year when you think about generative AI and the applications that are coming into our business, he said .I’m very excited about what the changes mean. On its busiest days, UPS processes 50 million packages in the United States and delivers more than 30 million packages worldwide. Tomé said the company is concerned about how disruptions caused by conflicts in the Red Sea and drought in the Panama Canal, which have made it difficult for ships to travel along typical routes, could affect the ship..

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