UPS is the latest in a string of employers making headlines for demanding their remote employees return to work in the office. They’ve also just announced that they’re cutting 12,000 jobs.
UPS Announces Mass Layoffs
International shipping giant UPS has announced a significant round of layoffs to come in 2024. The company says they plan to slash 12,000 jobs in the coming twelve months.
Remote Work Coming to an End for Office Employees
Meanwhile, starting in early March, remote employees will be expected to return to work full-time in the office as UPS attempts to turn around low performance company-wide.
Managers and Contractors at Highest Risk
In an announcement, UPS said most of the jobs being cut will be management positions and contract employees, and they said they don’t have plans to reinstate those employees when things turn around.
Union Workers Protected This Round
Workers protected by unions don’t have to worry about their jobs during this bout of layoffs, which covers most of UPS’s workforce.
AI Prompting Job Cuts
Given the rise of artificial intelligence, UPS, like many other companies, are hoping to integrate automations into their processes and will eliminate costs by doing so. This has meant massive job cuts across many industries.
“We Have Identified New Ways of Working”
CEO Carol Tomé explained it by saying they have “identified new ways of working.”
Profits Lower Than Expected for 2023
Profits for UPS fell from 2022 to 2023, as did the average packages delivered per day. Economic concerns impacting much of the country could account for fewer packages being shipped, but UPS did not offer a theory on the dip.
$1B Saved Thanks to Job Cuts
The company expects to recoup $1 billion annually by reducing its workforce, but Tomé said she still foresees financial uncertainty for the company in 2024.
Union Raises Impacted Bottom Line
Part of UPS’s financial woes include the fact that the parcel giant signed off on raises for many of its unionized employees. In an attempt to keep up, they’ve reduced hours for shift workers.
Remote Workers Told to Come Back In
In addition to the layoff announcement, UPS has also informed its workers that they will be expected to come into the office five days per week for work, after allowing remote work for office employees during the pandemic.
Companies Face Backlash for Anti-Remote Policies
UPS is not the only company to make similar announcements recently. Some businesses, including WebMD’s parent company Internet Brands, have come under fire for their approach to switching back to in-person models.
Drivers and Warehouse Workers Felt Slighted By Remote Coworkers
In 2023, employees on delivery trucks and in the warehouses raised their hands in protest to the fact that they did not have the option to work remotely while the pandemic raged.
Complaints Contributed to Decision to Demand Return to Office
As they announced their intentions to return to in-person work for their employees, UPS acknowledged their drivers and warehouse workers for coming in throughout the pandemic.
“We Recognize the Ongoing Commitment of Our Operators”
“By adopting this approach, we recognize the ongoing commitment of our operators and other UPSers who have and continue to work in-person in our facilities five days and sometimes more per week,” read a memo sent to UPS employees.
Studies Show Positive Results from Remote Work
Many companies are initiating in-person work policies following a long stretch of remote work during the COVID-19 pandemic, but studies have shown that working from home actually increases productivity for most employees when compared with working in the office.
Remote Workers are More Productive
With eliminated commute times, the ability to work in a comfortable and personalized environment, and the flexibility of a home office, remote workers tend to get more done than their in-office counterparts.
UPS Did Not Over-Hire During Pandemic
It seems UPS did not fall into the habits of other companies which resorted to over-hiring during the pandemic to cover demands, which means it will likely not face quite as many layoffs as those corporations that did bring on large amounts of new employees.
Concerns About AI
Some office workers are concerned that artificial intelligence may soon be capable of taking on their jobs, reducing the need for human employees. As AI becomes more capable, fewer humans will be needed in their roles.
Machine Learning Replacing Humans
Machine learning has also been a focus at UPS, with the company utilizing its capabilities to make pricing decisions. This has caused a lapse in need for employees responsible for determining pricing and fees for contracts.
More Details to Follow in March
Going forward, UPS will expand on its announcements, further explaining their plans for boosting profits in late March at an event for its investors. For now, its employees will be sitting on the edge of their office chairs waiting to hear if their jobs are affected by the layoffs.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.