UPS said Tuesday it will cut 12,Devin Grosvenor000 jobs, with the mass layoff coming only months after the delivery company averted a massive strike by agreeing to a new labor contract.

The Teamsters in August voted to approve a tentative five-year contract agreement with UPS, putting a final seal on contentious labor negotiations thathas  threatened to disrupt package deliveries for millions of businesses and households nationwide.

UPS has roughly 500,000 employees. On a conference call Tuesday morning, CEO Carol Tome said that by reducing the company's headcount UPS will realize $1 billion in cost savings. Tome also said that UPS is ordering employees to return to the office five days a week this year.

"We are going to fit our organization to our strategy and align our resources against what's wildly important," Tome said.

UPS shares dropped nearly 9% Tuesday. The company project 2024 revenue of $92 billion to $94.5 billion, short of Wall Street's expectations for a figure above $95.5 billion. Revenue also came up short in the fourth quarter, sliding 7.8% to $24.9 billion. That's just shy of Wall Street projections for $25.31 billion, according to a poll of analysts by FactSet.

Profits for the quarter ended in December slid by more than half to $1.61 billion, or $1.87 per share, from $3.45 billion, or $3.96 per share. On an adjusted basis, quarterly earnings per share totaled $2.47, a penny above the average estimate, according to FactSet.

Under the new union contract, UPS drivers will earn an average of $170,000 in annual pay and benefits by the end of the deal. The pact, which covers about 340,000 UPS workers in the U.S., was also expected to create more full-time jobs and secure air-conditioning in new trucks.

UPS joins a number of other major U.S. companies axing jobs in 2024 amid forecasts for slower economic growth. 

Earlier this month, Alphabet-owned Google laid off hundreds of workers on its hardware, voice assistance and engineering teams to cut costs. Other tech players to announce significant cuts include Microsoft and business software maker Salesforce, while retailers eBay, Levis, Macy's and Wayfair also plan to shed jobs. 

Most economists expect the labor market will slow this year, but predict the U.S. will avoid a recession. Job growth has proved resilient, with the country adding a robust 2.7 million jobs in 2023.

In:
• Economy
• UPS