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United Parcel Service (UPS) has disclosed plans to eliminate 12,000 jobs this year due to a significant decrease in delivery volumes. This decision is expected to save the company approximately $1 billion.

During a recent earnings call, UPS reported a 7.4% drop in its daily average domestic shipping volume and an 8.3% decline in domestic shipping. The company’s fourth-quarter revenue stood at $24.9 billion, a decrease of 7.8% from the previous year’s $27 billion. Despite these challenges, UPS returned a substantial $7.6 billion to its shareholders through dividends and stock buybacks.

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Carol Tomé, the CEO of UPS, described 2023 as a “unique, and quite candidly, difficult and disappointing year,” highlighting the company’s struggles with falling volumes, revenues, and operating profits across all business segments. Tomé also mentioned that UPS would request its employees to work from the office five days a week and is considering the sale of its freight brokerage business, Coyote, known for its volatile market performance.

This development follows shortly after successfully negotiating a new contract with the Teamsters union, which prevented a potential strike last summer.

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