Mass layoffs under way at UPS, Paypal and Block
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The news: US firms United Parcel Service (UPS), Paypal and Block have announced hefty headcount reductions as they face increased profit pressures.
The numbers: UPS said it will cut 12,000 jobs and explore strategic options for its trucking brokerage business Coyote, after the world's largest parcel delivery company forecast full-year revenue of USD92 billion ($139 billion) to USD94.5 billion, short of analysts' average target of USD95.57 billion. UPS shares plummeted 8% to USD145.32 amid weak demand from its retail, manufacturing and high tech customers.
Meanwhile, Bloomberg reported that payments giant PayPal will reduce its workforce by around 9%, impacting 2,500 workers, as the company faces increased competition and profit pressures. Shares of the payments giant, which announced similar cuts last January, have plunged more than 20% in the past year as earnings faltered, and the company lowered its full-year guidance for adjusted operating margin.
Fellow payments firm Block, headed by Twitter co-founder and former CEO Jack Dorsey, has begun cuts to around 1,000 jobs this week, after shareholders were told in November the company would trim headcount and reduce costs, according to Reuters.
The context: UPS CEO Carol Tome told analysts the company plans to cut USD1 billion in costs following a "difficult and disappointing" year, when volume, revenue and operating profit declined in all of its business segments.
PayPal's CEO Alex Chriss, who replaced Dan Schulman last year, told staff in a letter that the company would undergo direct cuts and the elimination of roles throughout the year.
Block's cost-savings program, which includes reducing its headcount from 13,000 to 12,000, comes amid worries across the wider payments sector that a slowing economy and high interest rates will continue to pressure consumer wallets.
