UPS to cut 1,800 jobs

ATLANTA (AP) — Shipping giant UPS Inc. will cut 1,800 management and administrative jobs, less than 1 percent of its global work force, as it repositions itself for a gradual economic recovery with improved technology and fewer employees.

About 1,100 employees will be offered a voluntary separation package as part of the work-force reduction, which is meant to streamline the company’s U.S. small-package segment. Other cuts will come through attrition and layoffs. The U.S. small- package segment represents roughly 60 percent of UPS’ annual revenue. It handles shipments of up to 150 pounds by ground and air.

UPS, based in Atlanta, has 408,000 employees worldwide. About 340,000 of those workers are in the U.S.

UPS also raised its profit forecast for the fourth quarter that ended in December, citing improving operations and cost cuts.

UPS will reduce its U.S. regions from five to three and its U.S. districts from 46 to 20 in April. There are no plans to close any operating facilities. UPS said the consolidation of offices will not affect the sales and operations team, including drivers. UPS expects to incur a one-time charge in 2010 because of the restructuring.

Spokesman Norman Black said UPS has the technology and management systems to oversee a much-larger geographic area than before. So, it is consolidating district offices. Thanks to systems such as package-flow technology with real-time information on every package destined for a particular city, one management team can oversee the work in many cities. The same thing goes for UPS’ human-resources systems and work-force planning. More- sophisticated computer operations allow UPS to more easily figure how many people it needs to sort packages in multiple locations, Black said.

UPS will change office staffing in its new, larger districts to strengthen marketing and sales efforts.

UPS also said it expects to post earnings of 73 to 75 cents per share for the October-to-December quarter. UPS had previously predicted earnings of 58 to 65 cents per share. UPS will report fourth- quarter earnings Feb. 2.

Standard & Poor’s upgraded UPS shares to a “buy” from a “hold,” saying it thinks revenue trends will continue to improve through 2010. Deutsche Bank kept a “hold” rating on UPS shares.

UPS previously cut thousands of jobs and held down costs during the economic downturn. As of the end of the second quarter of 2009, it had shed 15,000 jobs, mostly through attrition, compared with the same time in 2008.

In early 2009, UPS said it would freeze management salaries and suspend 401(k) matches for employees.