United Parcel Service (UPS) has revealed intentions to eliminate approximately 48,000 positions within this year as part of a significant restructuring initiative aimed at reducing expenses and enhancing operational efficiency, according to reports by the Associated Press. This decision follows the company’s third-quarter financial results, which exceeded the expectations of financial analysts.
The stock of the Atlanta-headquartered delivery behemoth surged by over 7% during Tuesday’s afternoon trading session subsequent to reporting earnings and revenue figures that surpassed projections. For the quarter ending on September 30, UPS recorded a profit of $1.31 billion, equivalent to $1.55 per share, in contrast to $1.99 billion, or $1.80 per share, reported in the corresponding period the prior year. Adjusted for one-time expenses, earnings per share reached $1.74, surpassing the anticipated $1.31 per share, as per data from Zacks Investment Research.
Quarterly revenue amounted to $21.42 billion, surpassing the anticipated figure of $20.84 billion by Wall Street analysts.
UPS disclosed in a regulatory filing that it has already eliminated around 34,000 operational roles and ceased daily operations at 93 leased and owned facilities within the initial nine months of the year. The company also declared an additional reduction of roughly 14,000 jobs, predominantly in managerial positions. Further facility closures may be announced as part of the continuous evaluation of its network.
Earlier this year in April, UPS had announced plans to cut around 20,000 jobs and shutter more than 70 facilities as it downsized its handling of Amazon shipments. By the conclusion of June, the firm had anticipated closing 73 buildings, with prospects of additional closures under consideration to streamline its operations.
In January, UPS finalized an agreement with its primary client, Amazon, to decrease shipment volumes by over 50% by the latter half of 2026. CEO Carol Tom mentioned during the company’s fourth-quarter earnings call in January that despite a nearly three-decade partnership with Amazon, UPS opted to reassess the relationship upon contract renewal this year.
To date, UPS has achieved cost reductions totaling approximately $2.2 billion as of September 30 and anticipates attaining annual cost savings of $3.5 billion by 2025. The company emphasized that these workforce reductions and operational adjustments are geared towards bolstering profitability and preparing for a deceleration in e-commerce growth compared to the peak years of the pandemic.