UPS in trouble !

Filed in archive Employment on December 28, 2006

United Parcel Service Inc. announced recently that it has offered "voluntary separation opportunities" to 650 workers at its corporate office in Atlanta, and at its supply chain Solutions facilities across the United States. The company did not disclose details of the separation packages. But workers must be age 50 or have 10 years of service to qualify, said UPS's Louisville-based public relations manager, Mark Giuffre.

According to Atlanta Business Chronicle, the job reductions come less than two months after UPS announced it would eliminate 1,200 positions at its Supply Chain Solutions subsidiary. Supply Chain Solutions offers a variety of third-party logistics functions, including warehousing, order fulfillment and shipping.

When UPS officials announced the Supply Chain Solutions reductions on Oct. 19, they told analysts that UPS's Supply Chain and Freight segment, which includes Supply Chain Solutions, UPS Freight and several smaller subsidiaries, has experienced high overhead costs stemming from two large consolidations.

The segment reported a loss of $19 million for the third quarter, compared with net income of $70 million a year earlier.

UPS has had difficulties integrating Menlo Worldwide Forwarding, which it bought in 2004, into UPS Supply Chain Solutions, and Motor Cargo Inc., which it bought in August 2005, into UPS Freight.

Both integrations have been completed, but they took longer and were more difficult than anticipated, leading to high overhead, officials said. The unit employs about 34,000 workers worldwide and 2,000 in Louisville.