(DailyVantage.com) – The UPS recently announced it’d be laying off 12,000 employees, just months after agreeing to a sizable pay increase for UPS drivers. A union negotiated the pay increase, which many UPS workers celebrated as a significant victory for the company’s drivers. The CEO of UPS, Carol Tome, explained the impending layoffs as an attempt to use the company’s resources effectively and develop a new strategy moving forward.
Tome discussed the layoffs during a conference call and cited 2023 as a challenging year for UPS. Throughout 2023, UPS’ revenue dropped by almost eight percent, falling below projections from Wall Street and other outlets. The company pulled in nearly half a billion dollars less than initially expected during the fourth quarter of 2023, indicating a sharp decline in UPS’ performance. The drop in revenue continued into 2024, with the UPS stock dropping almost nine percent on January 30th. According to Tome, the planned layoffs could save UPS approximately $1 billion.
Tome also announced that UPS employees are required to return to work at their offices throughout the work week in an effort to improve productivity and revenue performance. While Tome avoided discussing the details of the union agreement while sharing information on the company’s performance, many social media users believe the union agreement’s pay increase is responsible for UPS’ decline in revenue over the past few months. The agreement established a new salary for UPS drivers, increasing their pay to $170,000 annually.
The Teamsters’ Union helped organize the agreement and cited it as North America’s most significant private-sector union agreement. The Teamsters’ Union represented approximately 70% of UPS employees and demanded additional compromises beyond the aforementioned driver pay increase. The union deal also increased part-time UPS employees’ pay to $25.75 per hour and ended required overtime for the company’s employees.
While discussing the layoffs, Tome referred to the declining American economy and threatened strikes by Teamsters’ Union members and the union agreement. The UPS isn’t the only company facing massive layoffs, which some economists believe indicates a declining United States economy. Many political figures, such as former President Donald Trump, cite the ailing economy as the result of President Joe Biden’s pro-union policies and failure to address climbing inflation rates.
Copyright 2024, DailyVantage.com