UPS to cut 20,000 jobs this year as it slashes Amazon deliveries
United Parcel Service Inc. expects to cut 20,000 jobs this year and close dozens of facilities as it dramatically reduces shipments for e-commerce giant Amazon.com Inc.
United Parcel Service Inc. expects to cut 20,000 jobs this year and close dozens of facilities as it dramatically reduces shipments for e-commerce giant Inc.
The reduction in its operational workforce 鈥 a group that includes delivery drivers and package handlers 鈥 is part of a network overhaul in response to expected 鈥渓ower volumes from our largest customer,鈥 UPS said Tuesday in a statement that also detailed first-quarter results. The Atlanta-based company will shutter 73 leased and owned buildings by the end of June and said it may identify additional facilities for closure.
UPS aims to cut expenses and improve profitability after announcing a plan in January to slash the number of low-margin Amazon parcels it delivers by more than half over 18 months. The network reconfiguration is expected to generate $3.5 billion of total cost savings this year.
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Amazon said in an emailed statement that UPS requested a reduction in volume 鈥渄ue to their operational needs.鈥 Amazon will 鈥渃ontinue to partner with them and many other carriers to serve our customers.鈥
UPS has about 490,000 employees, suggesting the planned contraction will account for 4% of its staff. The move comes after it announced 12,000 management job cuts in early 2024.
The courier has sought greater efficiency in the face of a decline in volumes following a pandemic-driven boom in e-commerce. The industry is also grappling with new challenges from President Donald Trump鈥檚 tariffs, which have complicated cross-border goods shipments and injected volatility into the global economy. UPS on Tuesday backed away from its 2025 financial guidance, saying it wouldn鈥檛 provide an update 鈥済iven the current macroeconomic uncertainty.鈥
Still, the company reported adjusted earnings of $1.49 a share for the first three months of the year, topping the $1.40 average of analyst estimates compiled by Bloomberg. Revenue in the period also narrowly beat expectations.
The 鈥渂etter-than-feared鈥 results were boosted by gains in both domestic and international package revenue, Stephanie Moore, a Jefferies analyst, said in a note.
UPS shares were little changed at 10:38 a.m. in New York. Its stock tumbled 23% this year through Monday鈥檚 close.
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Economic Volatility
UPS and FedEx Corp. are viewed as barometers for the wider economy because their delivery networks span the industrial and retail sectors, providing insights into orders placed by manufacturers and consumers alike. Investors across industries have been looking for clues to the impacts of Trump鈥檚 trade policies, which threaten to tip in the economy into a recession.
UPS has been reworking its operations to shift away from low-margin parcels in favor of more profitable business lines. The company is working to position itself as a specialized logistics provider that can move higher-yield parcels such as temperature-controlled or urgent health-care shipments.
It agreed last week to acquire Canada-based health-care logistics company Andlauer Healthcare Group Inc. for $1.6 billion. The move is the latest in a string of deals as the company seeks to reach $20 billion in health-care revenue by 2026.
While UPS didn鈥檛 update its 2025 outlook, it said second-quarter revenue would come in around $21 billion. It previously predicted full-year revenue of about $89 billion and a full-year operating margin around 10.8%.
Chief Executive Officer Carol Tom茅 said on a conference call that the company would stand behind the 2025 guidance if conditions were to stabilize.
The decision not to update the annual forecast underscores the widespread uncertainty across corporate America after the Trump administration announced 鈥 and in some cases paused or adjusted 鈥 large tariffs on imports from other countries. Companies from American Airlines Group Inc. to footwear maker Skechers USA Inc. have pulled their outlooks, while UPS rival FedEx cut its outlook in March.
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