United Parcel Service (UPS) - Get Report is planning to offer buyouts to some of its management-level employees in a bid to trim costs, even as the delivery giant continues to rake in revenue amid the coronavirus pandemic and shift to online ordering and delivery.
The Atlanta-based company is expected to present the buyouts to qualifying management in non-operations roles on Friday, according to reports. The workers would leave in two phases: by the end of 2020, and mid-2021.
"UPS is providing voluntary severance offers to some employees as part of its transformation," a spokesman confirmed to Dow Jones. "Aligning our talent with the needs of our company and customers is critical to becoming a stronger, more agile UPS."
Demand for shipping services from UPS has surged since the coronavirus pandemic struck, as shoppers stayed home and bought more products online - and a reduction in international passenger flights boosted demand for UPS's air network.
At the same time, e-commerce giant Amazon.com’s (AMZN) - Get Report efforts to beef up its own global delivery network as well as competition from Fedex (FDX) - Get Report and other domestic and international delivery companies is prompting Big Brown to focus on being “better, not bigger,” CEO Carol Tome said on last month's earnings call.
While looking to reduce ranks and costs at the top, UPS is not sparing expenses on the front lines. The company last week said it was prepping to hire more than 100,000 seasonal employees ahead of what is expected to be a surge in holiday sales-related package volume.
“We’re preparing for a record peak holiday season. The Covid-19 pandemic has made our services more important than ever,” Charlene Thomas, chief human resources officer of the Atlanta company, said in a statement.
Shares of UPS were up 0.39% at $160.38 in trading on Friday.