UPS says it will lay off 12,000 of its employees

United Parcel Service Inc (NYSE: UPS) says it will lower its headcount by more than 2.0%. Shares of the shipping giant are trading sharply in the red at writing.

How many employees will be laid off?

The transport company based out of Atlanta, Georgia will lay off about 12,000 of its employees in total.

Carol Tome – the chief executive of United Parcel Service expects the move to deliver some $1.0 billion in savings.

The news arrives months after UPS reached a deal with Teamsters – a labour union that represents more than half of its employees. More importantly, the New York listed firm had hired 100,000 seasonal workers in September to prepare for the holiday demand.

Note that UPS stock is still up about 10% versus its low in late October.   

UPS had a disappointing Q4

Also on Tuesday, United Parcel Service cited a decline in shipping volume as it reported weaker-than-expected revenue for its fourth financial quarter (read more).

The multinational now forecast up to $94.5 billion in revenue and operating margin (adjusted0 at about 10.3% for its fiscal 2024. According to CEO Carol Tome:

Still, Wall Street currently has a consensus “overweight” rating on $UPS that pays a dividend yield of 4.10% at writing. Last week, Invezz reported that over 170 million job cuts are expected this year due to AI.