united parcel service announced On Tuesday, the company announced it would lay off 12,000 workers, just five months after it celebrated agreeing to a big union-negotiated pay increase for its drivers.
“We’re aligning our organization to our strategy and aligning our resources to what’s really important,” CEO Carol Thome said on a conference call.
He went on to say that 2023 was a “difficult and disappointing year” for the company.
The company reported fourth-quarter sales fell 7.8% to $24.92 billion, slightly below Wall Street expectations of $25.31 billion. according to Go to NPR.
UPS stock plunged nearly 9% on Tuesday.
Tomé said the layoffs will save the company about $1 billion, adding that employees will be told to return to the office five days a week.
Many on social media blamed the company for its problems. trade union agreement They signed an agreement that increases the driver’s salary to an astonishing $170,000. When the deal was announced in August, social media was abuzz with memes depicting UPS drivers as suddenly wealthy.
The Teamsters Union touted the agreement in August as “the single largest private collective bargaining agreement in North America.” The union represented approximately 70% of the company’s employers.
The company agreed to raise pay for part-time workers to $25.75 an hour and also eliminated overtime requirements as part of the union agreement.
Tomé also blamed the overall economy for the disappointing outlook, citing the Teamsters’ strike threat and union agreements.
Other companies have also announced layoffs in recent months, which some economists see as a sign of economic weakness. Polls show Americans hold President Joe Biden responsible for high inflation, which has had a huge negative impact on household finances.
Details of the announcement are as follows:
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