UPS announces job cuts, declining revenue

When it rains, it pours. And even though UPS packages get delivered in inclement weather, the same can’t be said for the company’s latest earnings report.

The shipping giant’s Q4 2023 earnings were a bad-weather doozy all the way around—from revenue to shipping volume to its workforce.

“2023 was a unique and quite candidly difficult and disappointing year,” UPS CEO Carol Tomé said in an earnings release. “We experienced declines in volume, revenue, and operating profit in all three of our business segments.”

UPS reported $24.9 billion in revenue, marking a 7.8% decrease from the same quarter in 2022.

A large driver for the revenue dip was a demand slowdown: The company reported a 7.4% domestic and 8.3% international decline in average daily volume. Weakness in the European market was a heavy drag internationally, according to Tomé, while conflict in the Red Sea region further complicated global shipping.

And then there’s the fraught labor situation: The company announced it would cut 12,000 jobs this year. On the earnings call, Tomé said the layoffs could produce around $1 billion in cost savings.

It’s not a great look—to say the least. Last year, UPS dealt with labor negotiations as Teamsters fought for better pay. UPS and the Teamsters reached a tentative contract agreement last summer.

The financial impacts of last year’s labor deal didn’t come up this time around, but Tomé did include them as one contributor to company’s overall “disappointing” year, per CNBC.