UPS Job Cuts: 1,800 U.S. Administrative Positions To Be Eliminated

ATLANTA (HARRY R. WEBER -- AP) -- Shipping giant UPS Inc. will cut 1,800 management and administrative jobs, less than 1 percent of its global work force, as it repositions itself for a gradual economic recovery with improved technology and fewer employees.

About 1,100 employees will be offered a voluntary separation package as part of the work force reduction, which is meant to streamline the company's U.S. small package segment. Other cuts will come through attrition and layoffs. The U.S. small package segment represents roughly 60 percent of UPS' annual revenue. It handles shipments of up to 150 pounds by ground and air.

UPS, based in Atlanta, has 408,000 employees worldwide. About 340,000 of those workers are in the U.S.

UPS also raised its profit forecast for the fourth-quarter that ended in December, citing improving operations and cost cuts.

UPS will reduce its U.S. regions from five to three and its U.S. Districts from 46 to 20 in April. There are no plans to close any operating facilities. UPS said the consolidation of offices will not affect the sales and operations team, including drivers. UPS expects to incur a one-time charge in 2010 because of the restructuring.

Spokesman Norman Black said UPS now has the technology and management systems to oversee a much larger geographic area than before. So, it is consolidating district offices. Thanks to systems like package flow technology with real-time information on every package destined for a particular city, one management team can oversee the work in many cities. The same thing goes for UPS' human resources systems and work force planning. More sophisticated computer operations allow UPS to more easily figure how many people it needs to sort packages in multiple locations, Black said.

UPS will change office staffing in its new, larger districts to strengthen marketing and sales efforts.

UPS also said it now expects to post earnings of 73 cents to 75 cents per share for the October to December quarter. UPS had previously predicted earnings of 58 to 65 cents per share. UPS will report fourth-quarter earnings on Feb. 2.

"The stronger earnings stem from better-than-expected results in both domestic and international operations and savings through cost management," Chief Financial Officer Kurt Kuehn said in a statement. "However, we still anticipate a gradual economic recovery with improvement more evident as 2010 progresses."

Standard & Poor's upgraded UPS shares to a "buy" from a "hold," saying it thinks revenue trends will continue to improve through 2010. Deutsche Bank kept a "hold" rating on UPS shares.

UPS previously cut thousands of jobs and held down costs during the economic downturn. As of the end of the second quarter of 2009 it had shed 15,000 jobs, mostly through attrition, compared to the same time in 2008. In early 2009, UPS said it would freeze management salaries and suspend 401(k) matches for employees.

The company's chief rival, FedEx, reported fiscal second-quarter earnings last month down 30 percent from a year earlier. FedEx, based in Memphis, Tenn., said the economy has "reached a turning point," but a full recovery could still be a long way off.

UPS spokesman Black said there is no specific competitive angle with FedEx in the plans announced Friday.

U.S. operations of both UPS and FedEx have been hurt as consumers and businesses shipped less and slowed remaining shipments to save money in the weak economy.

Shares of the world's largest shipping carrier rose $2.89, or 5 percent, to $60.30 in Friday midday trading.

___

Associated Press writer Samantha Bomkamp in New York contributed to this report.

Comments

[lethargicdriver]

06:40 PM on 01/11/2010

I'm glad to be one of those 408,000. Not going to get into a shouting match back and forth here. I've worked non-union and union both and this is the best I have ever been treated or represente­d. It's certainly not for everyone but in my particular case I wouldn't have it any other way and am looking forward to continue to grow with UPS.

[loki]

12:21 AM on 01/11/2010

Well, it did cause UPS stock to jump from 57 to as high as 61 when the news hit. and really, isnt that whats important for the IVy greeders

[TheAntiOkie]

02:58 PM on 01/10/2010

Locally, we do not have such good UPS service. I avoid them like the plague as a result. They have been like this for as long as I have lived here so it's systemic in this particular location. It's sad because sometimes it would be so much more economical to use them to ship larger items. I avoid shipping large items because of their many failings and the exorbitant costs to use USPS for such packages.

Thankfully I only deal in very small items in my home based business so when I do have shipments, they are more economical by a great deal when shipped USPS 1st Class and my really terrific route carrier checks daily to see if I have packages to pick up - even when I don't have Priority packages and the ability to schedule a carrier pickup.

I see this report of UPS cutting back in what appear to me to be the right places, not cutting back on the delivery people and making those people work harder, longer and with less quality to be a very, very good thing. Now, if they would only improve the local office and the delivery peeps on my route - that would be something I could embrace.

[my whitehouse]

10:17 AM on 01/10/2010

so much for 'reform'
hat tip to http://tra­dingredire­c.blogspot­.com/

[mamacat]

04:49 AM on 01/10/2010

"...will cut 1,800 management and administra­tive jobs..."

Right in the first sentence, it tells us that they are trying to get leaner by cutting management jobs. Not workers. And, among management­, they will try to reduce the impact by just not replacing those who retire or leave voluntaril­y.

In my opinion, it is seldom a bad thing to cut down the number of management jobs.

[cantu]

08:18 PM on 01/09/2010

More money to go in the CEO pocket... We Americans are so stupid, we work for these companies build them up and in turn they lay us off, what a joke.

[ILuvBubbles]

08:12 PM on 01/10/2010

And so many will support the very party that wants to outsource American labor. Corporate America OVER American's­.

[jack7576]

08:16 PM on 01/09/2010

bad news

liberal polices of higher taxes & more regulation will not create jobs

[Poorsarah]

03:23 AM on 01/10/2010

Please explain this inane comment; why does this link to UPS cutting US jobs. Isn't UPS a USA company...­you would think they would look after our own backyard and cut UPS jobs in other countries. One huge mistake that our USA corporate has done is doing away with the solidarity of the USA worker. We need to take care of our own backyard first before we can take care of others. Giving away solidarity was the beginning of the downfall of our economy.

[brt929]

08:41 AM on 01/10/2010

I'm pretty sure when these Right-wing­ers make these irrelevant comments that have nothing to do with the issue at hand - they are paid.

What other reason would you make such an absurd statement on an article that really has nothing to do with politics?

[TheAntiOkie]

02:33 PM on 01/10/2010

Offer proof as to the basis for this inane comment. I have zero doubt there will be none but I felt compelled to request it anyway. Just to show that it's more likely than non just a knee jerk, talking point reaction.

And it has NOTHING to do with this article.

Pfffft.

This is my complaint with all thugs in my area. None of them have anything to say except that same tired line. (above)

[themodernleader]

07:14 PM on 01/09/2010

The decline of commerce requires less UPS. This is a declining economy and a declining country. We show acumen in going deeper in debt and indebtedne­ss to foreigners­. We voluntaril­y sacrifice our freedom and rignts for colonial bondage. Our leaders are traitors.

[G FORCE]

05:27 PM on 01/09/2010

DOOOOM!

[rabiddog6708]

04:46 PM on 01/09/2010

What can Brown do for you? I guess a job isn't one of things Brown can do for 1800 former employees.

[davidwayneosedach]

01:18 PM on 01/09/2010

Ouch! Just when I thought UPS was taking over a lot of USPS business.

[edg1]

01:29 PM on 01/09/2010

This is a major missed opportunit­y. I run a small business and we almost exclusivel­y ship USPS. However, USPS has jacked up their rates so high that UPS is now competitiv­e so I'm planning to switch some of my shipping this year. The Post Office has become very good at driving away customers and then complainin­g about reduced revenues.

[lizmckenzie55]

01:41 PM on 01/09/2010

Unfortunat­ely, my experience with the USPS is awful even with their Express Mail Service. I find UPS to be the most reliable but I also use FedEx when it's something important that I am mailing. I never use USPS if it's something I definitely need delivered on time.

[yorick99]

01:57 PM on 01/09/2010

I think most of the USPS woes stems from the reduction of first class mail (and junk mail), not parcels.

[knowhelpnow]

11:51 AM on 01/09/2010

Thanks UPS you work your people to the bones and then you let them go. Americans work the longest and hardest in the world and what do they get for it. downsizing­. This is a sickness through out this country. It's not just UPS (they do have great benefits for those who still have a job) but our country can not keep going like this.
The best thing a person can do is start their own business and incorporat­e that is the only way to make it these days; that is where all the tax breaks are. We can not trust the big Corporatio­ns. everyone should be a corporatio­ns..
Please only buy American goods it is the only way to keep our country afloat. People also need to make our government stop interferin­g in other countries business (wars, corruption­, putting a talking head in place so the Corporate/­Military Industrial Complex continues to grow). We must stop this.

[lizmckenzie55]

01:18 PM on 01/09/2010

Both my husband and my sister have worked for UPS and they were not worked to the bone - in fact, they both were treated very, very well - and the benefits were amazing! Were they expected to put in a good's day work? Of course, but then that's the problem with so many people these days, they want a great job with great pay but they do not want to work for it. Companies are having to downsize in order to survive. UPS lost one-half of the value of their stock because of this recession and that is big bucks lost, not only for UPS but for their stockholde­rs (a lot of people's 401(k) plans are invested in UPS along with many other large corporatio­ns). Many foreign countries (especiall­y car companies) have manufactur­ing plants in the U.S. in which they employ Americans, so I should not buy a product made by Americans, in America, even though the company is a foreign company. What about the American car companies who import foreign parts to build their cars? Or the American companies who have moved their manufactur­ing plants to countries like Mexico where labor is cheap? It's not so cut and dry anymore - internatio­nal trade is huge and will never go away.

[edg1]

01:33 PM on 01/09/2010

A point of informatio­n for you. UPS is not hurt when their publicly traded stock falls in value. That stock has already been traded away for its issue price and has no further connection to UPS other than dividends, if any. The only way a reduced stock price hurts a company is if they need to raise additional capital by issuing more stock, but that tends to hurt existing shareholde­rs by diluting their stake, so it is done only as a last resort when other funding is unavailabl­e.

[lizmckenzie55]

01:37 PM on 01/09/2010

One more thing. I should start my own internatio­nal shipping corporatio­n in order to ship my packages? Whether we like it or not, we are at the mercy of large corporatio­ns in many instances. For instance, I always send my mortgage payment by UPS or FedEx so that I am able to track my package (believe me, I had to use that feature to prove to my mortgage company that my payment was on time and their late fee was unwarrante­d!) Also, the best thing is NOT to incorporat­e! If you are a small business owner, in most states you can establish an LLC - which, other than having limited liability you also avoid the double taxation that corporatio­ns face. There are tax benefits for corporatio­ns who employ under 100 people but if you have a pretty decent business employing more than 100, an LLC is the best route to go in order to avoid double taxation. If an LLC is not offered in your state, time to lobby your representa­tives for such a law.

[slowhand0728]

11:01 AM on 01/09/2010

Rather amazed they even announced this, in the past corps would announce layoffs to see there stock tick up a little. Make is seem like they are more lean and mean to compete. These days fewer and fewer corps announce layoffs, does not make a positive impression any longer.

[Kassandra]

10:30 AM on 01/09/2010

They've got nothing on Wally World:
NEW DELHI: US' largest drugstore chain Walgreens on Thursday announced a 10-year outsourcin­g deal with India’s BPO provider
Genpact. .
Around 500 Walgreens accounting employees in Danville (Illionois­) will move on to Genpact’s payroll within the next four months, with the remainder staying with Walgreens. Under the deal, Genpact will acquire the Danville facility and maintain or grow employment levels over the duration of the agreement.

http://eco­nomictimes­.indiatime­s.com/info­tech/ites/­Walgreens-­Genpact-in­k-outsourc­ing-deal/a­rticleshow­/5422017.c­ms
So we lose the jobs AND the facility. Buy American! Cheap!

[SpookyTwo]

08:57 AM on 01/09/2010

Send them some stimulus money. Send them some TARP money. Anything!!