UPS plans to shake up its domestic delivery structure to make itself more nimble in the midst of a nascent economic recovery. But Atlanta will be spared most of the 1,800 job losses among managers and administrative employees.
Sandy Springs-based UPS said Friday it will use a mix of attrition, voluntary retirements, layoffs and office mergers to trim the workforce and streamlineU.S. operations.
A regional office with between 50 and 60 employees in Sandy Springs will be closed; the local employees could be eligible for other jobs, early retirement or a severance package. UPS plans to reduce the number of U.S. "regions" in its small package operation from five to three; it will also slash the number of district organizations to 20 from 46.
The company stressed that its shipping coverage and service will not change. The company said it has the management expertise and technology to manage much larger geographic areas from fewer offices.
On Friday, UPS also said it expects stronger earnings because of cost cuts and operating results that have been better than expected in the U.S. and international markets. The shipping giant boosted fourth-quarter earnings guidance, saying it expected earnings to range between 73 cents to 75 cents a share, up from a previously announced 58 cents to 65 cents.
UPS is considered an economic bellwether because it helps manage the global flow of goods. The company said Friday it expects a gradual economic recovery. The downturn has caused jittery shoppers to cut their spending, slicing into factory orders and global commerce. UPS, which operates in more than 200 countries and territories, has remained solidly profitable but saw its volumes and profits reduced last year.
Friday's announcement marks the latest cost-saving measure instituted at UPS, which has more than 10,000 employees in the Atlanta area, 340,000 in the U.S. and 408,000 total across the world. As volumes declined, UPS shed jobs in the U.S. -- often using attrition rather than layoffs.
UPS said it will offer voluntary separation packages to 1,100 of the 1,800 employees targeted in the latest reduction. Others will receive severance benefits based on their length of time with the company. The job losses do not involve hourly employees, the package operations or drivers, according to UPS.
UPS is making itself "leaner and meaner, so that, once the economy bounces back, they are stronger to fight FedEx," said Sandeep Kar, program manager in the North American automotive and transportation practice at Frost & Sullivan.
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