Latest news with #Amazon-related
Int'l Business Times
30-04-2025
- Business
- Int'l Business Times
UPS Cuts 20,000 Jobs, Closes Centers as Amazon Delivery Volume Drops
UPS announced Tuesday that it will eliminate 20,000 jobs and shut down 73 buildings in the US by the end of June, as the company continues reducing the volume of packages it handles for Amazon. The decision is part of a broader plan to streamline operations and lower costs amid changing business conditions. UPS CEO Carol Tomé said the company is reconfiguring its network to become more efficient. "The actions we are taking to reduce cost across our business could not be timelier," Tomé stated. "With our actions, we will emerge as an even stronger, more nimble UPS." According to CNN , the job cuts, which account for about 4% of UPS's global workforce, are unrelated to tariffs and are instead tied to the company's increased use of automation and its move to scale back business with Amazon. UPS said that about 400 of its facilities are expected to become partly or fully automated, which will reduce the need for manual labor. UPS and Amazon have maintained a strong working relationship for almost 30 years. But earlier this year, UPS chose to reduce the amount of business it does with the retail giant. UPS Sees 16% Drop in Amazon Shipments, Plans Bigger Cut Earlier this year, UPS CEO Carol Tomé acknowledged that while Amazon continues to be the company's largest customer in terms of volume, it does not contribute the highest profit margins. UPS has already seen a 16% drop in Amazon-related volume in the last quarter and plans to cut it by over 50% by mid-2026. The Teamsters union, which represents over 300,000 UPS employees, issued a strong response following recent corporate layoffs at the company. Union leadership made it clear that while they would not oppose UPS reducing positions in corporate management, any threat to union-represented jobs would be met with significant resistance. Teamsters President Sean O'Brien emphasized that the union is prepared to take strong action if necessary to protect the well-paying jobs of its members. UPS has announced its financial performance for the first quarter, posting a net income of $1.19 billion or $1.40 per share, Adjusted earnings reached $1.49 per share, beating analysts' expectations. UPS reported first-quarter revenue of $21.55 billion, exceeding Wall Street's forecast of $21.06 billion, AP said. Though UPS isn't updating its 2025 revenue outlook of $89 billion, the company warned that ongoing economic uncertainty — including new tariffs on Chinese imports — could impact future earnings. UPS CEO Carol Tomé addressed concerns regarding the company's business activity in China, highlighting ongoing uncertainty. Originally published on
Yahoo
30-01-2025
- Business
- Yahoo
UPS Reports Q4 Earnings Beat, Plans Cost-Cutting Amid Amazon Volume Decline
United Parcel Service (UPS, Financials) reported fourth-quarter earnings that exceeded analyst expectations, driven by revenue growth and operational improvements. The corporation is emphasizing operational efficiency in 2025 and higher-margin business divisions while lowering costs to counter a projected drop in Amazon shipment volume. In the fourth quarter, UPS brought in $25.3 billion, a 1.5% rise over last year. Operating profit increased 11.2% to $3.1 billion; adjusted profits per share came in at $2.75, above consensus projections of $2.53. From operations, the corporation brought in $10.1 billion in cash; via buybacks and dividends, it returned $5.9 billion to investors. With revenue per package rising 2.4%, U.S. domestic operations brought in 2.2% to $17.3 billion. Supported by an 11.7% rise in export volume, international income rose 6.9% to $4.9 billion. While air and ocean freight forwarding grew by 10.3%, supply chain income dropped with Coyote Logistics's sale. Targeting $1 billion in cost cuts, UPS is implementing its "Efficiency Reimagined" program. The strategy calls for operational tweaks and network improvement to offset a projected Amazon drop in package volume. To concentrate on small and medium-sized companies, healthcare logistics, and international shipping, the corporation promised to cut Amazon-related shipments by over 50% by the second half of 2026. As of Jan. 1, 2025, it also took complete management of SurePost delivery from the U.S. Postal Service; but there is no predicted major financial consequence from this shift. UPS projects an operating profit of 10.8% and a sales goal of $89 billion for 2025. Though volume is expected to decline, U.S. domestic business is expected to witness a 6% increase in revenue per package. With an operating margin of 18.6%, the foreign division is likely to see mid-single-digit volume increase. Forecasted at $11 billion with an 8.5% margin is supply chain income. Every quarter UPS anticipates domestic margins to rise; by year-end they will have reached 8.8%. Although analysts pointed highlighted UPS's emphasis on profit growth and cost control, they expressed worries on the effect of dropping Amazon business. With an eye on small enterprises and healthcare logistics, CEO Carol Tome said the firm is giving profitable, agile growth top priority. With 11.8% of UPS income coming from Amazon shipments in 2024, the volume loss poses a major concern. Analyzers also mentioned competition pressures from FedEx (FDX, Financials) and the U.S. Postal Service, which may affect price. Maintaining profitability of the firm depends on the effectiveness of its cost-cutting plan. UPS is turning its attention to maximize income sources and improve operational effectiveness. Although fourth-quarter numbers were good, the company's financial success in 2025 would depend critically on its capacity to control decreasing Amazon volumes and carry out cost cuts. This article first appeared on GuruFocus. Sign in to access your portfolio
