UPS said Friday it will cut 1,800 management and administrative positions to streamline its U.S. small package segment.
The world's largest package delivery company also raised its profit forecast for the fourth-quarter that ended in December, citing improving operations and cost cuts.
About 1,100 employees will be offered a voluntary separation package as part of the work force reduction, UPS said.
UPS has 408,000 employees worldwide. About 340,000 of those workers are in the U.S. The small-package segment, where most of the cuts will come, handles shipments of up to 150 pounds by ground and air.
UPS will reduce its U.S. regions from five to three and its U.S. Districts from 46 to 20 in April. There are no plans to close any operating facilities. UPS said the consolidation of offices will not affect the sales and operations team, including drivers. UPS expects to incur a one-time charge in 2010 because of the restructuring.
UPS Inc., based in Atlanta, raised its fourth-quarter earnings prediction, saying it now expects to earn 73 to 75 cents per share. UPS had previously predicted earnings of 58 to 65 cents per share. UPS will report fourth-quarter earnings on Feb. 2.
"The stronger earnings stem from better-than-expected results in both domestic and international operations and savings through cost management," Chief Financial Officer Kurt Kuehn said in a statement. "However, we still anticipate a gradual economic recovery with improvement more evident as 2010 progresses."
The company's chief rival, FedEx, reported fiscal second-quarter earnings last month down 30 percent from a year earlier. FedEx, based in Memphis, Tenn., said the economy has "reached a turning point," but a full recovery could still be a long way off.
U.S. operations of both UPS and FedEx have been hurt as consumers and businesses shipped less and slowed remaining shipments to save money in the weak economy.
UPS shares rose $2.92, or 5.1 percent, to $60.33 in morning trading. FedEx shares added 67 cents at $83.65.
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