Sudden Announcement! This Global Logistics Giant: 12,000 Layoffs Coming.

CCTV news: local time on January 30, United Parcel Service (UPS) announced that it will lay off 12,000 employees. A spokesman for the company said the layoffs would save the company about $1 billion in costs. UPS is also considering selling its Coyote truck brokerage business.

The company's fourth-quarter 2023 earnings report showed a decline in both international and domestic shipments. For the last three months of 2023, the company earned net income of $1.61 billion, or $1.87 per share. This compares to net income of $3.45 billion, or $3.96 per share, in the same period a year earlier.

The company's CEO said the company took these steps with the intention of offsetting the effects of weak demand and rising union labor costs. She said the company also plans to require employees to return to the office five days a week in 2024.

At the same time, she said on the earnings call, "We're going to adjust our organization to fit our strategic needs and align our resources with what's very important." She noted that the positions will not return in the future, even if business increases, because "the way we work has changed."

UPS, which is considered a global economic weathervane, does not expect the business climate to improve until the second half of 2024. According to the report, UPS on Tuesday projected full-year revenue of $92 to $94.5 billion, below analysts' average target of $95.57 billion.

The decision to lay off employees comes amid the company's lower-than-expected forecast for full-year 2024 revenue.

It is understood that in August last year, the logistics giant had just reached a new labor agreement with its unionized employees to significantly increase wages and expand benefits, and the average salary of its truck drivers will reach about $170,000 per year, making them the highest-paid drivers in the United States.

The company's shares fell about 7% in early trading on the 30th due to the earnings report and news of the layoffs.