UPS Reports Disappointing Q4 Results and Announces 12,000 Layoffs

United Parcel Service (UPS) fell short of Wall Street revenue estimates in its Q4 earnings report, reporting drops in shipping volume both internationally and domestically. The company also announced 12,000 layoffs as part of an effort to align resources in 2024. The workforce reductions are expected to save UPS about $1 billion in costs, according to CEO Carol Tomé.

Tomé referred to 2023 as a unique and disappointing year for UPS, with declines in volume, revenue, and operating profits across all three business segments. The company reported a 7.4% drop in average daily volume domestically and an 8.3% decrease internationally, pointing to softness in Europe and freight complications in regions like the Red Sea and Panama and Suez canals.

While the earnings report did not directly mention any financial impacts from labor contract negotiations with the Teamsters in August, Tomé cited these talks and the broader macroeconomic environment as contributors to the disappointing year. Additionally, UPS indicated that it is considering selling its Coyote truck brokerage business, citing its cyclical nature and considerable earnings volatility.

In terms of its outlook for 2024, UPS anticipates revenue in the range of $92 billion to $94.5 billion, which falls short of Wall Street’s expectations. The company’s shares dropped nearly 9% following the announcement. In the fourth quarter, UPS reported revenue of $24.92 billion, down 7.8% from last year, and profits of $1.61 billion, a decline of more than half compared to the same period last year.