UPS Slashes 12,000 Jobs In Cost-Cutting Move, Shares Plunge
Portfolio Pulse from Piero Cingari
United Parcel Service Inc. (NYSE:UPS) shares fell sharply after reporting lower-than-expected revenues and future guidance. The company announced a reduction of 12,000 jobs to save costs, with labor contract-related costs exceeding estimates by $500 million. UPS's Q4 revenues were $24.9 billion, down from $27 billion, and full-year sales declined by 9.3% to $90.96 billion. The 2024 revenue forecast is set between $92 billion and $94.5 billion, below analysts' expectations of $95.57 billion, with a projected adjusted operating margin of 10% to 10.6%.
January 30, 2024 | 4:34 pm
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UPS shares dropped significantly due to disappointing revenue figures and future guidance, along with the announcement of 12,000 job cuts aimed at saving $1 billion in 2024.
The sharp decline in UPS shares is directly related to the reported earnings miss and the negative outlook for 2024. The job cuts, while a cost-saving measure, indicate significant restructuring that may concern investors about the company's near-term performance. The market's reaction to the news is likely to continue in the short term, putting downward pressure on the stock.
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