UPS will shed 1,800 managerial jobs in a reorganisation of its US domestic package business inApril even though it now expects better profits for Q4, 2009, and anticipates gradual economic
recovery in 2010.The company announced on Friday that it expects to exceed its previously announced estimatefor October – December 2009 earnings, now anticipating a range of $0.73 to $0.75 per diluted share.The company previously projected earnings of $0.58 to $0.65 per diluted share for this period.Results for Q4, 2009 and the full 2009 year will be released on February 2, 2010.
“The stronger earnings stem from better-than-expected results in both domestic andinternational operations and savings through cost management,” said Kurt Kuehn, UPS’s chieffinancial officer. “However, we still anticipate a gradual economic recovery with improvement moreevident as 2010 progresses.”
At the same time, UPS announced it is streamlining the domestic management structure of itsUS small package business by reducing the number of regions and districts. Effective in April, thecompany will reduce its US regions from five to three and its US districts from 46 to 20.
The restructuring will eliminate approximately 1,800 management and administrative positionsacross the country. Normal attrition will minimise some job displacements, and approximately 1,100employees will be offered a voluntary separation package, UPS said. In addition, other impactedemployees will receive severance benefits and access to support programs based on length ofservice.
UPS stressed there are no plans to close any operating facilities and the consolidation ofoffices will not affect the unique relationship between customers and UPS’s sales and operationsteam, including drivers. As part of the realignment, UPS will expand its outreach to customers bystrengthening local sales and marketing efforts.
“The new management structure creates regions and districts that are better alignedgeographically,” said Scott Davis, UPS chairman and CEO. “In turn, this will enable more localdecision-making and resources to be deployed for our customers.
“The decision to reduce our workforce is difficult and we appreciate the significantcontributions of those who will be affected by this change,” he continued. “But we believe thiswill allow us to sharpen our focus on profitable growth while being even more nimble in serving ourcustomers.”
As a result of the restructuring, UPS expects to incur a one-time charge in 2010 that will beoffset by cost savings in the US small package business.
