After the boom years of the pandemic shopping spree, package delivery giant UPS is taking a hit. (And it doesn’t’ help that the golden goose of shipping demand—Amazon—is taking more and more of its delivery work in house.) The latest bomb to drop came today (Jan. 30) when UPS announced it is cutting 12,000 employees this year from its over 500,000-person workforce. The company expects the move to save it $1 billion per year, and it says that AI will help make up for the staffing cuts.
Maybe a Rosier Outlook at DHL and FedEx
AI, and AI-powered automation, are playing a bigger role in the shipping industry overall. DHL has been highlighting its extensive use of AI in automating logistics, such as sorting, stacking, and packing shipments. “The fear that robots will somehow replace humans is misplaced. It’s not about taking peoples’ jobs, but about taking over certain activities,” the company website seeks to reassure. If that’s true, DHL must have cracked some code that UPS believes it cannot. So far, that looks possible, as the company has had only fairly small, surgical layoffs in recent years.
Automation is also playing a central role at FedEx. At Worth’s Techonomy 23 conference on “The Promise and Peril of AI,” Rebecca Yeung, FedEx’s corporate vice president for operations science and advanced technology, highlighted the company’s ambitious AI expansion. It includes the use of robots for tasks such as truck loading and unloading, and packing up and unpacking palettes. Yeung stressed the challenge of developing robots with the situational awareness to work safely with humans.
And she paints a pro-worker image in her discussion. “[For us] to really generate the best value, to make our team members’ jobs easier and more productive, is to listen to them and to see what jobs are harder for humans to do—more strenuous in nature—and then work on those,” she says.
FedEx hasn’t spoken as explicitly about AI being a way to trim its worker roles. The company has had a stronger financial outlook, with expected growth this year, and has had relatively small rounds of layoffs, which has included closing some stores. (Its Express air cargo division is under the most pressure due to less business from the US Post Office, prompting ongoing tensions over efforts to reduce the number of and pay for its pilots.)
If AI can effectively take over jobs, it’s hard to imagine struggling companies not taking advantage of that to lower headcount. But if companies can continue to grow, they may still need all those employees—maybe even more—even with the assistance that AI and automation provide.
