In the wake of UPS’s announcement it would cut 12,000 jobs in 2024, aided by AI, one can’t help but wonder whether we’re living the plot of a science fiction movie. Today’s blog post will discuss the reasoning behind the UPS job cuts, whose careers are at stake, and how you can leverage these changes to lower your shipping costs.

Why does UPS need to cut so many jobs?

On January 30, UPS released its Q4 2023 earnings report— and the results were grim but not unexpected given last year’s potential strike and a decline in e-commerce. The carrier revealed 2023 revenues of $24.9B, compared to $27.0B the previous year. Additionally, its consolidated operating profit was down 27.1% on an adjusted basis, and diluted earnings per share dipped 31.8% compared to the same period in 2022.

In its Q4 2023 earnings call, UPS CEO Carol Tomé said, “2023 was a unique and quite candidly a difficult and disappointing year. We experienced declines in volume, revenue, and operating profit in all three of our business segments.” The disappointing year appears to be a call to action, spurring UPS to make changes— starting with a workforce reduction of 12,000 positions.

How will UPS manage without 12,000 employees?

Who will take up the slack for the missing 12,000 managers? The more appropriate question isn’t who, but what. Discussing UPS’s future, Tomé said, “When you think about the advent of Generative AI and the applications inside of our business, we’re just getting started, and I’m really excited about what the future will mean in terms of driving productivity and as well as improving the customer experience.”

It’s not the blue-collar or unionized employees’ jobs at risk due to AI, though. Instead, UPS is cutting management positions. Out of nearly half a million staff, the carrier currently employs approximately 85,000 UPSers in management positions. After this year’s cull, with 75% of cuts coming in the first half of the year, the number in management is expected to drop significantly.

What does this mean for you?

The UPS layoffs aim to reduce costs by $1 billion, but cutting jobs isn’t enough— it also needs to ensure shipping volume. UPS reported a 7.4% decrease in average daily volume domestically and an 8.3% decline internationally, and they’re eager to rebuild business. The good news? UPS’s loss can be your gain.

Customers who use ShipRx’s parcel contract negotiation service often see their shipping costs decrease by 20-30%, and there’s never been a better time to negotiate. Get in touch with us today for a free savings analysis. We’ll check your current contract and let you know if there are savings opportunities and how you can cut costs without compromising on service. We only get paid when you save money, so there’s nothing to lose except unnecessary spending!

Brittany ShipRx Contributor