UPS announces job-cuts, increases Q4 projections

United Parcel Service (UPS) Inc. today announced specific plans as part of its cost-cutting initiative that is set to take effect this April. UPS also increased its forecast of expected earnings for Q4 2009, and said it expects to now beat analyst expectations of $0.63 per share. The company is now expecting EPS to be in the range of $0.73-$0.75, significantly up from analyst expectations of $0.58-$0.65 per share for Q4 2009.

The company announced today it would cut up to 1,800 jobs as part of a broader cost-cutting restructuring plan.

The company confirmed today the job-cuts would come from management and administrative roles at the firm across the United States.

 UPS CEO and chairman, Scott Davis, thanked the affected employees for their contributions and acknowledged the job cuts, while difficult, were necessary.

The broader cost-cutting plan will begin implementation April 2010, the jobs cuts will start to occur slowly after then.

UPS also confirmed that it would decrease districts (but increase regions) served in the United States, without closing or affecting any distribution centers.

The market has reacted favorably with the UPS stock now trading 5-percent up at $60.21 per share.

UPS said it would net an increase in equity as a result of savings from the cost-cutting moves despite expected charges.

The new layoffs at UPS come as Washington today announced up to 85,000 jobs were lost in December 2009, with unemployment still hovering above single digits at 10-percent. Aggregately in 2009, 4.2-million jobs were lost in the United States.

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Peggy holds a Bachelor Arts degree with honors in Economics from York University in Toronto, Canada. She is a Certified Management Accountant (CMA). She has also passed Level I of the Chartered Financial Analyst (CFA) Program. She is also a realtor. Write to [email protected]
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