UPS Has Already Cut 48,000 Workers This Year

Business|UPS Has Cut 48,000 Workers Since Last Year

UPS has since last year reduced its work force by 48,000 employees, the company said on Tuesday, in a cost-cutting drive aimed at bolstering profits and winning back investors.

The Atlanta-based delivery company, which had nearly half a million employees at the start of the year, said 34,000 positions were cut this year among its drivers and warehouse workers, mostly in the United States. The other 14,000 came out of management’s ranks in cuts that began last year.

UPS’s stock price has long lagged the wider stock market, putting pressure on its leaders to deliver stronger profits. News of the work force reductions and better-than-expected third-quarter results prompted a 7 percent jump in the company’s shares on Tuesday.

“We are executing the most significant strategic shift in our company’s history, and the changes we are implementing are designed to deliver long-term value for all stakeholders,” Carol Tomé, UPS’s chief executive, said in a news release.

Employment has stalled across the economy, according to the latest government data. And other companies are also shrinking their work forces. Amazon is planning to cut 14,000 white-collar jobs, a company memo said, to reduce bureaucracy and shift resources.

UPS reported net income of $1.3 billion in the third quarter, down from $1.5 billion in the same period a year earlier. Revenue totaled $21.4 billion in the third quarter, a decline from $22.2 billion last year.

Though profit declined, UPS executives pointed to improvements elsewhere in the results on a call with Wall Street analysts on Tuesday. Revenue per package in the United States grew 10 percent in the third quarter from the year-ago period, Ms. Tomé said.

Many of UPS’s employees are members of the Teamsters union, which in April warned the company that it would fight job cuts that were not in line with its labor contract. On Tuesday, Ms. Tomé said UPS was “in compliance with the terms of our contract.”

A Teamsters spokeswoman did not respond to requests for comment.

UPS’s business has also been roiled by the imposition of tariffs this year. The volume of packages sent to the United States from China fell nearly 30 percent in the third quarter.

President Trump this year closed a loophole that had allowed huge numbers of shipments valued at or below $800, mainly from China, to enter the United States without being subjected to tariffs. After Mr. Trump first closed the loophole for those shipments from China and Hong Kong in May, the flow of packages entering the United States declined sharply, to approximately one million packages a day from some four million a day previously, Customs and Border Protection said in August.

UPS delivers parcels for Amazon, but the company said it had reduced that business because it was not profitable. The company delivered 21 percent fewer Amazon parcels in the third quarter, compared with last year.

Even after Tuesday’s rally, UPS’s stock is down by nearly a fourth this year. FedEx’s shares have fallen 11 percent. The S&P 500 index, measuring the performance of large companies, is up 17 percent so far this year.