UPS Eliminates 48,000 Jobs While Working Toward $3.5 Billion Cost-Cutting Target

Core Insights - United Parcel Service (UPS) has significantly reduced its workforce by 48,000 jobs in the first nine months of the year as part of a turnaround strategy amid declining revenues and package volumes [1][6] - The company reported third-quarter earnings of $1.3 billion and revenue of $21.4 billion, both of which were declines but exceeded Wall Street's expectations [1] - UPS has been impacted by external factors such as tariffs and a decrease in package volumes, particularly from China, which fell 30% year over year in the third quarter [3] Financial Performance - UPS's third-quarter earnings were $1.3 billion, with a revenue of $21.4 billion, indicating a decline compared to previous periods but still surpassing market expectations [1] - The company has achieved $2.2 billion in year-over-year cost savings as of September 30, 2023, and aims to reach a total of $3.5 billion by the end of the year [6] Strategic Changes - Under CEO Carol Tomé, UPS is implementing a $3.5 billion cost-reduction plan that includes job cuts and the scaling back of unprofitable business segments, such as reducing Amazon shipping volumes by 50% by the second half of 2026 [3][6] - In the third quarter, UPS successfully reduced Amazon parcel deliveries by 21% compared to the previous year, despite Amazon contributing nearly 12% of revenue in 2024 [3] Market Position - UPS's stock has a high dividend yield of 7.4%, which is more than three times the S&P 500 average of 2.3%, raising concerns about sustainability; however, executives have indicated that there are no plans for a dividend cut [4]