(Reuters) -United Parcel Service said on Tuesday it would hire more than 100,000 seasonal workers to handle the 2023 holiday rush, a similar number of employees it hired a year earlier during the same period.

The world's largest package delivery company, which earns the largest chunk of its revenue during the fourth quarter that includes the festive season, said it was filling full- and part-time seasonal positions by across shifts in hundreds of locations across the country.

Both UPS and rival FedEx Corp hire thousands of temporary workers each year to move more parcels between the months of October and January.

Hiring at UPS comes against the backdrop of a new five-year contract, covering some 340,000 Teamsters-represented workers in the U.S., which would increase wage and benefit costs for the company.

Last month, the Atlanta-based firm cut its full-year revenue and profitability targets, citing higher-than-expected labor costs as well as business lost during the tumultuous contract talks with Teamsters union.

UPS executives said in August that customers shifted 1 million packages per day to other providers, resulting in about $200 million in lost sales. They estimated that roughly a third of that volume landed with FedEx.

Analysts expect holiday sales to grow at a slower pace this year as high inflation eats into household budgets.

A report from career consultancy firm Challenger, Gray & Christmas showed that weaker spending and increased labor costs would result in U.S. retailers hiring the lowest number of seasonal workers this year since 2008.

(Reporting by Mehr Bedi in Bengaluru, Additional reporting by Priyamvada C; Editing by Vinay Dwivedi)