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UPS is set to lay off 12,000 workers this year, attributing the decision to a notable slowdown in delivery volume, a move anticipated to yield savings of $1 billion for the shipping giant, according to a report by The Hill.

"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," UPS CEO Carol Tomé said in a statement.

UPS Reports 7.4 % Decline in Shipping Volume

During a company earnings call on Tuesday, UPS reported a 7.4 percent decline in the daily average domestic shipping volume and an 8.3 percent decrease in domestic shipping. The fourth-quarter revenue for UPS was $24.9 billion, marking a 7.8 percent decrease from the previous year's $27 billion.

Despite facing reduced revenue and implementing job cuts, UPS highlighted that it returned $7.6 billion to shareholders via dividends and stock buybacks. This move comes within half a year of the Teamsters union ratifying a new contract with UPS.

Difficult and Disappointing Year

The UPS CEO, Carol Tomé, acknowledged the challenges faced by the company in 2023, describing it as a unique, difficult, and disappointing year. The company witnessed volume, revenue, and operating profits declining across all three business segments.

In addition to the job cuts, Tomé announced that UPS would be urging employees to return to the office for a five-day workweek throughout the year. Moreover, the company is exploring the possibility of selling its freight brokerage business, Coyote, deemed "highly cyclical."