3PL/Logistics

UPS has announced that, although it expects to exceed its previously announced estimate for Q4 2009 earnings, it plans to streamline its US domestic management structure and reduce its small package operation

Effective April, UPS will reduce its US Regions from five to three and its US Districts from 46 to 20 As part of the restructuring, UPS will expand its outreach to customers by strengthening local sales and marketing efforts

The restructuring will eliminate approximately 1,800 management and administrative positions across the country, approximately 1,100 of whom will be offered a voluntary separation package

UPS says it does not plan to close any operating facilities, and the consolidation of offices will not affect the relationship between customers and UPS's sales and operations team, including drivers

"The new management structure creates Regions and Districts that are better aligned geographically," said UPS chairman & CEO Scott Davis "In turn, this will enable more local decision-making and resources to be deployed for our customers"

Davis commented that while the decision to reduce its workforce is difficult, the move will allow the company to sharpen its focus on profitable growth

The restructuring is expected to incur a one-time charge in 2010 that will be offset by cost savings in the US small package business