UPS takes hit as AI's impact on the workforce plays out: 'Difficult and disappointing year'

RALEIGH, N.C. (WTVD) -- UPS announced it's cutting 12,000 jobs around the world over the next several months after what it says was a "difficult and disappointing year," with lower shipping volumes and labor costs rising.

"In 2023, dynamic external and economic conditions led to lower volume and a more than $9 billion decline in revenue year over year," UPS said in a statement.

The sweeping layoffs come as many companies are turning to artificial intelligence to save costs, including UPS.

The company has not answered how many of the job cuts will be in North Carolina but said they will provide support to all affected employees, including severance packages and outplacement assistance.

Seyed Emadi, who works at the UNC Kenan-Flagler Business School, said companies such as FedEx and DHL have also been hit by the economic conditions.

"During the pandemic, there was a boom in terms of people couldn't go out so they had to ship a lot of stuff," UNC's Seyed Emadi said. "Because of that, the number of packages that people are sending are going to go down. UPS ... is going to think, OK, so now I probably should cut some cost."

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Emadi said he expects that managers could make up most of the layoffs as they're one of the several types of jobs at risk of being replaced by AI.

"Most of the white-collar jobs are in more danger in comparison to blue-collar jobs," Emadi said. "But ... I think it's going to affect all sectors."

On the flip side, artificial intelligence has helped healthcare systems such as UNC Health to be more efficient when it comes to taking patient notes.

"It listens to the conversation," UNC Health's Brent Lamm said about DAX Copilot.

While there are more opportunities to use AI in the healthcare workforce, Lamm said they still have an overarching guiding principle that a human is going to be in control.

"From our perspective, we do believe this is going to drive more productivity, more efficiency, and hopefully more quality," Lamm said. "We'll be able to do a much better job of what we are good at, I believe, with this technology."