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UPS stock down before market open as company says it’s eliminating about 12,000 jobs

UPS slid before the opening bell Tuesday as the package delivery company announced that it’s eliminating approximately 12,000 jobs and looking at strategic options for its Coyote truck load brokerage business.

Last year union members at UPS voted to approve a tentative contract agreement, putting a final seal on contentious labor negotiations that threatened to disrupt package deliveries for millions of businesses and households nationwide.

On a conference call Tuesday morning, CEO Carol Tome said that by reducing the company’s headcount UPS will realize $1 billion in cost savings.

“We are going to fit our organization to our strategy and align our resources against what’s wildly important,” Tome said.

She also announced that this year UPS is returning to a policy of having its employees back in the office five days a week.

United Parcel Service Inc. anticipates 2024 revenue in a range of approximately $92 billion to $94.5 billion.

Analysts surveyed by FactSet predict revenue of $95.51 billion.

UPS also posted fourth-quarter revenue of $24.92 billion, below analysts’ estimates of $25.31 billion and a decline of 7.8% from the prior year.

Earnings for the quarter ended in December slid by more than half to $1.61 billion, or $1.87 per share, from $3.45 billion, or $3.96 per share. On an adjusted basis, quarterly earnings per share totaled $2.47, a penny above the average estimate, according to FactSet.

The company’s board approved an increase of 1 cent in its quarterly dividend to $1.63 per share, payable March 8 to shareholders of record Feb. 20.

Shares of UPS dropped nearly 6% in premarket trading.