UPS lays off 12,000 managers as AI replaces jobs

Artificial intelligence allows UPS to fire 12,000 managers without ever having to rehire them. The company is also making other radical changes, such as requiring employees to be in the office five days a week. In order to become more efficient, UPS is laying off a significant number of its employees and replacing them with artificial intelligence.

Last year there were talks between UPS and the unions, during which Carol Tomé said the company's motto would change from "better not bigger" to "better and bolder". The company is cutting 12,000 of its 85,000 management jobs because labour costs have risen sharply and inflation has eroded customers' purchasing power. The aim is to save around $1 billion.

Carol Tomé explains that the job cuts have been made possible by new technologies, such as artificial intelligence, and will help ensure that those made redundant will not have to be rehired in the future. Home working will also be restricted and employees will be asked to return to the company five days a week, among other changes to be announced on 26 March. Another slap in the face is the fact that many of the managers being made redundant started their careers as parcel deliverers:

It will not boost morale. Invariably they cut out a lot of real contributors and a lot of knowledge.

- Glenn Gooding, industry consultant at iDrive Logistics and former UPS manager

Shares in the parcel giant fell more than 8 % and revenue fell 7.8 % to $24.9 billion from $27 billion a year earlier. The company also said it was considering the sale of Coyote, a freight broker that connects shippers with carriers.

2023 was a unique, and quite candidly, difficult and disappointing year. We experienced declines in volume, revenue and operating profits and all three of our business segments.

- Carol Tomé