UPS laying off 333 as it eliminates shift at Ontario air hub

UPS plans to eliminate a shift at its regional air hub at Ontario International Airport next month, resulting in 333 layoffs.

In a March 6 notice to the state Employment Development Department, the delivery giant said the cuts, effective April 27, are tied to a “volume loss in our network.”

“We often evaluate our operations and flex our network to meet volume demands,” UPS said in a statement issued Wednesday, March 13. “This allows us to continue delivering industry-leading service while also maintaining competitive prices.”

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The company’s downturn is reflected in its fourth-quarter 2023 earnings report, which saw average daily domestic volume fall 7.4% below 2022 levels, while international volume was down 8.3%.

That was followed by the UPS’ announced plan to eliminate 12,000 positions — mostly full- and part-time management roles and contract workers — as the company “seeks to align its resources” this year.

In a January earnings call, CEO Carol Tome said the workforce reductions will save the company about $1 billion in costs.

“2023 was a unique and, quite candidly, difficult and disappointing year,” she said. “We experienced declines in volume, revenue and operating profit and all three of our business segments.”

Tome tied some problems to labor disruptions as the company sought to avoid a strike, and higher costs associated with the new contract.

Affected employees at the 775,000-square-foot Ontario facility include non-union workers and union employees represented by Teamsters, Local 63 in Rialto. The layoffs will affect a variety of jobs, including 131 employees who load and unload packages, 26 hub supervisors and scores of others, the company said.

Human Resources Director Lori Cruz said the displaced union workers will have “bumping rights,” meaning they can displace non-union employees under the Local 63’s collective bargaining agreement.

Company spokesman Matt Skeen said union workers on the layoff list will also have the option of filling open positions in Ontario or at other area UPS facilities. The company operates in Rialto, Rancho Cucamonga and Fontana.

“Generally, we always make a good faith effort on the part of the company to place laid off employees in open positions when they become available,” Skeen said. “If I was a package driver, for example, I might have the option of filling another job inside the Ontario facility.”

UPS reported net income of $1.61 billion for the final three months of 2023, well below the $3.45 billion posted a year earlier during the same period. The company also hinted that its Coyote truck-load brokerage business may be put up for sale.

The company had about 495,000 employees as of January, according to Tome. That’s down from a high of 540,000 during peak COVID-era demand.

Amazon now stands as the biggest parcel delivery business in the U.S., and the gap between it and UPS and FedEx is only set to expand, according to a recent analysis by the Wall Street Journal.

Internal Amazon projections estimated the company would log about 5.9 billion U.S. deliveries by the end of 2023, the Journal reported.

Meanwhile, UPS said its 2023 domestic delivery volume was unlikely to top 5.3 billion, while FedEx’s fiscal 2023 delivery volume was just over 3 billion.