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UPS announced Tuesday that it will cut 12,000 jobs as part of a bid to save $1 billion costs. Managers and contractor positions will make up most of the layoffs.

The job cuts come as UPS issued a disappointing sales outlook for this year, saying it expects global revenue of between $92 billion to $94.5 billion. That would be up from the $91 billion in revenue it reported for 2023, but analysts surveyed by Refinitiv had been expecting revenue of at least $95.6 billion.

UPS lost business last year as customers concerned about a possible strike by the Teamsters shifted shipments to rival carriers, such as FedEx. Although UPS said it expects to get most of that business back, it had won back only about 60% of that lost business.

UPS said it has about 85,000 managers as part of its global workforce of nearly 500,000 employees. It has more than 300,000 hourly US workers represented by the Teamsters union.

“It’s a change in the way we work,” said CFO Brian Newman. “So as volume returns to the system, we don’t expect these jobs to come back. It’s changing the effective way that we operate.”

This is a developing story. It will be updated.

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