business news in context, analysis with attitude

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From the New York Times:

"United Parcel Service plans to cut about 12,000 jobs this year as the company tries to slash costs in the face of falling package volumes and higher wages linked to a union contract it signed in the summer.

"Carol Tomé, the chief executive of UPS, told analysts on an earnings call Tuesday that it had been a 'difficult and disappointing year.'  Revenue fell more than 9 percent last year, and profit dropped by a third.

"Ms. Tomé said most of the job cuts would be made in the first half of the year, reducing expenses by about $1 billion. UPS employs nearly 500,000 people."

Earlier this year, UPS came to an agreement with the Teamsters, which represents 340,000 of its employees, that gave those employees significant pay increases.  Now, apparently, management is blaming that pay increase at least in part for the layoffs.

Of course, Marketplace on National Public Radio recently noted that pre-agreement, Tomé’s annual compensation was in the neighborhood of $19 million, which was more than 300 times yearly pay for an average UPS employee.  But when CEOs - especially those making that kind of money - look for reasons that the business is not doing well, they almost always land of some combination of unknowable external events and high employee wages.  It never, never, is about how they got overpaid for not running the company very well.