The Reason FedEx and UPS Have Cut Hiring Despite Rising Demand

They would rather pay overtime to existing drivers and logistics staff than add people who may be difficult to cut when the ecommerce shipping surge ends.

And they know Amazon is biding its time, waiting for the right moment to ramp up its cut-throat competitive delivery service again. JL

Joshua Frulinger reports in Thinknum:

On this date last year, UPS listed 650 jobs more than listed today. At FedEx, hiring is at its lowest level in two years. The spike in demand is seen as temporary by UPS and FedEx. Any massive investment in personnel right now could be risky assuming that when the economy opens up, demand will plummet as people lose the ability to make use of shipping services. UPS and FedEx have shown that they are well-versed in cyclical hiring, so this lack of job-listing activity concerning for frontline workers who are already working more than ever.

"I'm working more than I ever have in almost 24 years," Jack Warren, a UPS ($NYSE:UPS) driver in Providence, Rhode Island, told CNN.

Because of ubiquitous stay-at-home orders, people are turning to e-commerce and delivery more than ever. As a result, workers at UPS and FedEx ($NYSE:FDX) are being stretched thinner than ever, even more so than the peaks they typically see during holiday seasons.

But, inexplicably, both UPS and FedEx are not responding to the crunch with a hiring spree as they normally would do during the annual holiday rush. At UPS, the company lists 1,740 openings on its HR and recruiting websites. In November, just ahead of the holiday crunch, it was hiring for 11,500 positions. That 1,740 openings may sound like a good number, but on this date last year, UPS listed 2,690 openings, 650 more than is listed today.

UPS told Thinknum Media in a statement that, despite the reports from CNN, its hiring needs are "flat".

"Our current hiring needs are relatively flat with some areas of the country tighter than others," a company spokesperson told us. "But in general, we are only hiring where attrition is a factor – students graduating and moving on from our part-time positions or retirements in the full-time driving ranks. "

Last April was business as usual at UPS. But this year, workers are saying that they are getting "hammered". Two employees died from COVID-19 at the company's Kentucky Worldport facility, where workers sort and process 2 million packages per day.

Brian Lee, a UPS delivery truck driver in Seattle, says he's working 60 hours a week. Workers are stretched thin, and assuming UPS is still collecting delivery fees, it has the headroom to ramp up staffing. And given its experience in the area with its seasonal hiring practices for the holidays, it's certainly capable.

As of this week, hiring at UPS is down more than 35% compared to this time last year.

At FedEx, hiring is at its lowest level in at least two years. This comes after reports that the logistics company's Memphis hub was hit with at least 10 confirmed COVID-19 cases, which is sure to concern and pressure workers.

On March 14, FedEx listed 3,400 openings on its recruitment websites. As of this week, that number is down to 1,290, an astonishing 62% drop. Meanwhile, FedEx received a $60 million federal government contract to ramp up its medical supply shipment operations. But how is FedEx spending that money? Based on its hiring numbers, it doesn't appear to be reinvesting in people.

FedEx received a $60 million federal government infusion to ramp up its medical supply shipment operations. But how is FedEx spending that money? Based on its hiring numbers, it doesn't appear to be reinvesting in people.

It's possible that the spike in demand is seen as temporary by checkbook holders at UPS and FedEx. Any massive investment in personnel right now could be risky assuming that when the economy opens up, demand will plummet as people lose jobs, income, and the ability to make use of shipping services. Analysts are already cautious on both UPS and FedEx stock, saying that "unemployment levels will lead to lasting economic challenges".

That's all reasonable, but UPS and FedEx have shown that they are well-versed in cyclical hiring, so this lack of job-listing activity is curious and, at the very least, concerning for frontline workers who are already working more than ever to keep goods moving.