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UPS pushing forward with automation and facility closures, threatening thousands more jobs

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UPS pushing forward with automation and facility closures, threatening thousands more jobs

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UPS Velocity warehouse in Louisville, Kentucky. [Photo: UPS Media]

During a Third Quarter earnings call last week, UPS management announced “progress” in the company’s plans to reduce capacity, automate operations and slash jobs. Management said it has reduced capacity by 1 million packages so far this year, the product of the closure of 45 operations, including nine full buildings.

Part of the “Network for the Future” cost-cutting plan, the closures resulted in a reported 8 percent improvement in the number of parcels processed per work hour, equivalent to “an efficiency gain of 11 million hours.”

This reduction in capacity is aimed at re-sizing UPS’s operations to shrink the company’s surplus capacity of an average of 12 million parcels a day, double the surplus from years before the pandemic. The surplus capacity is due to both the expansion of operations to meet increased demand during the height of the pandemic and a steady decline in demand over the past few years. Daily volume in quarter three 2021 was 23.4 million but declined to 20.3 million the same time last year.

Reductions in capacity really means a reduction in jobs. By levering automation to increase efficiency, management is seeking to cut labor costs and boost profitability at the expense of the working class.

Towards this end UPS announced earlier this year that it would close around 200 facilities in the US while tripling the number of automated facilities to 400 by 2028. In preparation for this the company is laying off more than 10,000 people in middle and lower management, and it already employs tens of thousands fewer workers than it did a few year ago. But this is only the start of a larger jobs bloodbath.

Closures will be joined with consolidation. UPS is boasting plans to consolidate four facilities in Massachusetts, Connecticut and Rhode Island and has highlighted its operations in Chalk Hill, Texas, and its New York Capital Village Center hub for closure.

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