United Parcel Services (UPS) plans to slash about 2% of its 500,000-person workforce. Most of the 12,000 job cuts will be full- and part-time management positions and contract roles, UPS executives said. No employees represented by the International Brotherhood of Teamsters have been affected, the union—which represents some 300,000 UPS workers—told Quartz.
The cuts are part of the delivery giant’s efforts to change how it works, which include using AI and other technologies to make operations more efficient, said CEO Carl Tomé. Notably, the types of jobs the company has decided to trim suggest how hard it is to automate the labor-intensive work of being a delivery driver.
UPS also reported that revenue plunged 9.3% last year. The company posted an adjusted operating profit of $9.9 billion, down 28.7% from 2022. The steep revenue drop comes as people have been ordering fewer things online compared to when pandemic lockdowns left them stuck at home.
UPS avoids a major strike, raises wages of rank-and-file workers
It also happens that the job cuts took place after the Teamsters ratified a new contract with the delivery company last August, avoiding a nationwide strike that could have brought UPS packages to a standstill and cost the economy more than $7 billion.
The union said UPS members overwhelmingly supported the five-year contract. It includes wage gains of at least $7.50 an hour for current employees over the length of the deal, along with minimum wage increases for part-time workers, from below $17 an hour to $21.
Teamsters president Sean O’Brien said the contract was the most lucrative ever at UPS and served as a model for other employees who are looking to organize. “This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention,” O’Brien said in a statement.
Not just layoffs
Along with the job cuts, UPS is expecting its remaining desk workers to come back into the office—five days a week.