MOLINE, Ill. — UPS announced Tuesday that it will lay off 12,000 employees in an effort to save $1 billion in costs.
During a conference call, CEO Carol Tome called the company's 2023 revenue "candidly difficult and disappointing."
UPS business surged during the pandemic as online shopping boomed. The company's sales topped $100 billion for the first time in 2022. This past year, however, it saw drops in shipping volume across the globe. The shipping conglomerates revenue dipped to $91 billion this past year, a 9.3% decrease from 2022.
The company says managers and contractor positions will make up most of the layoffs. Teamster Union employees, which make up 300,000 of the company's 500,000 staff members, will not be impacted. This comes after a contract agreement between Teamsters and UPS this summer raised union wages by 12.1%.
"This is a non-thing for the Teamsters," University of Wisconsin Madison Labor Education Professor Michael Childers said. "They still need their workforce, because their workforce is what makes them successful."
Although a tough day for many, workers in our area will not be impacted.
"They don't hire extra drivers to have around," Childers said. "People employed in those roles are there because they're necessary and essential to them being able to accomplish their business goals."
"I think this is a situation where it was just the volumes weren't as had been projected, and therefore, moving those packages through the system generated less revenue for them," Childers added.
UPS currently has about 85,000 managers as part of its global workforce.