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Yahoo
06-05-2025
- Business
- Yahoo
‘We're getting double whammied right now': Local union president reacts to planned UPS layoffs
KNOXVILLE, Tenn. (WATE) — As part of the largest reconfiguration in UPS history, the package delivery service announced it will be slashing 20,000 jobs and closing over 70 facilities. According to the union that represents some of our area's UPS workers, Teamsters Local 519, around 300 employees have been laid off since January. Teamsters 519 President Wes Trotterchaud said this is mostly due to the Knoxville UPS hub closing for renovations and automating positions, but tensions are rising with more positions on the chopping block. Knox County prosecutor fired over social media posts, DA's office to review all cases 'There will be one heck of a fight that's fixing to happen between the Teamsters and UPS,' he said. 'Our members are very, very concerned because they've already endured a lot of layoffs because of the shut-and-gut at the Knoxville facility.' In January of this year, the UPS facility off Callahan Drive temporarily closed for renovations and a modernization initiative called 'Network of the Future.' According to UPS, this is to bring in new technology and automate parts of their facilities. Trotterchaud said it is taking jobs away from his union members. 'We're getting double whammied right now,' he said. 'Where you're enduring a shut-and-gut which they've moved a lot of our work out of the area, a lot of our bypass work out of the area, and now the 20,000, we're feeling the impact.' He said besides losing their jobs, one of the main ways employees are feeling this impact is working long, 10-plus hours, and customers may start noticing too. 'It causes chaos for the customers who's waiting on their medications, creates job eliminations through layoffs and things of that, which I don't think anybody likes,' said Trotterchaud. Repair work begins on Gay Street Bridge to restore pedestrian access But what Trotterchaud said may cause chaos, UPS said could bring updates to a 118-year-old company. 'It is a it's definitely a new era with corporate America and automation and AI, and it is coming very strong, right now,' he said. Trotterchaud added he was shocked to learn of the layoffs since Teamsters had recently signed a contract with UPS promising to create nearly 30,000 more jobs in the next few years. However, the UPS spokesperson said they will comply with all contractual obligations, and they are working to place as many employees as possible in other positions. ▶ See more top stories on He added the Callahan Drive facility should reopen sometime in 2026. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
01-05-2025
- Business
- Yahoo
UPS ditched Amazon to be more profitable. Now it's slashing 20,000 jobs and plans to close over 70 facilities
Global courier UPS is cutting 20,000 jobs and automating hundreds of facilities as it tries to boost profitability in the midst of a massive overhaul of its delivery network. Earlier this year, the company announced an ambitious plan to decouple from Amazon in favor of more profitable packages—just before Trump's tariff announcements sent global trade volumes plunging. United Parcel Service made waves earlier this year when it announced a breakup with the world's largest e-commerce retailer. Amazon, a competitor as well as a customer bringing in over one-tenth of UPS' revenue, had turned unprofitable for the shipper, and in January of this year, UPS announced plans to slash the volume it delivered for Amazon by 50% in about a year and a half. 'They are our largest customer, but they are not our most profitable customer,' UPS CEO Carol Tomé said in an interview with Bloomberg Television, describing the move as 'taking control of our destiny.' Three months later, that destiny has become clearer as UPS announces plans to slash 20,000 jobs, close 73 facilities, and retool its shipping network to use less human labor—changes the shipper said were 'in line' with the Amazon volume it was losing, but also set it up to be more profitable going forward. 'We are executing the largest network reconfiguration in our history,' Tomé said on the company's earnings call Tuesday after announcing the changes. The Amazon deliveries UPS is dropping are 'not profitable for us, nor a healthy fit for our network,' she said. What's more, UPS plans to increase automation, she said, which will 'lessen our dependency on labor [and] reduce the capital requirements needed to run the network.' About half of the buildings to be closed are in the eastern U.S., CFO Brian Dykes said. The 20,000 jobs cut will 'be made across the entire U.S. network.' UPS's modernization push, parts of which have been previously announced, involves consolidating and closing 200 sorting facilities over five years. Under the plan, nicknamed "Network of the Future,' the shipper has been automating package sorting; it's also looking at using robotics for tasks like loading and unloading trailers and applying labels, Tomé told investors. Ultimately, some 400 facilities in UPS' network will be partially or fully automated, Nando Cesarone, president of U.S., told investors. 'The end result will be a much more efficient operation with less dependency on labor,' he said. That's unwelcome news to the Teamsters union, which represents about 350,000 UPS workers, and which also bargained a historic contract for its workforce two years ago. 'If UPS wants to continue to downsize corporate management, the Teamsters won't stand in its way,' Teamsters President Sean O'Brien said in a statement. 'But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.' UPS's decoupling from Amazon may be the easy part of its reconfiguration, however. Weeks after it announced that change, President Donald Trump announced tariffs on U.S. trading partners, effectively raising consumer prices on thousands of goods and launching the nation into a series of high-stakes renegotiations with dozens of nations. Currently, importers are paying a baseline 10% tariff on all imports and 145% on most imports from China, while varying rates of 'reciprocal tariffs' on almost 60 countries are set to kick in this summer. That upheaval meant fewer shipments for UPS in February and March, and led the shipper to yank earnings guidance for the rest of the year. 'The world hasn't been faced with such enormous potential impacts to trade in more than 100 years,' Tomé said. 'The only thing we're certain of is we don't know which, if any, of our scenarios will play out.' Only about 2% of UPS's volume comes from international packages, executives said. Still, UPS's China-to-U.S. trade lines are the company's most profitable, Tomé told investors. But as that route dries up, the company sees demand growing in shipments from China to the rest of the world, as well as from Europe, Thailand, and Vietnam. The company is expecting a 9% drop in U.S. shipping in the second quarter and a modest drop in revenue. 'There's so much uncertainty around China, now it's been announced,' Tomé said. 'We don't know actually what will happen. We don't know if it will fit. There are many things we don't know.' This story was originally featured on
Yahoo
01-05-2025
- Business
- Yahoo
UPS to eliminate 20K jobs as Amazon decoupling accelerates
UPS plans to shed about 20,000 front-line positions in 2025 as it manages the decline in unprofitable business from Amazon and a huge restructuring of its delivery network, executives said Tuesday during a first-quarter earnings briefing. The integrated parcel and logistics giant in January reached an agreement to reduce Amazon volumes in its network by more than 50% by June 2026. Outbound deliveries from Amazon fulfillment centers are not profitable compared to returns and outbound volumes from retailers that sell on the Amazon marketplace. About 60% of UPS's Amazon business is lossmaking. Meanwhile, UPS (NYSE: UPS) one year ago announced an aggressive strategy for network consolidation and automation aimed at improving profitability by better matching capacity and labor with lower parcel volumes. Management told analysts on Tuesday that the Amazon transition plan has been factored into the company's network reconfiguration. The optimization plan, called Network of the Future, envisions closing 200 sortation centers over five years. UPS intends to close 164 operational shifts in the first phase of the program, including 73 buildings by the end of June, Chief Financial Officer Brian Dykes said on the earnings conference call. The company, for example, recently disclosed plans to temporarily close a facility in Portland, Oregon, this summer to enable renovations. Dykes said the initiative is expected to eliminate $3.5 billion in expenses this year alone. About 35% of the savings will come from culling 25 million operating hours across the workforce. Semi-variable costs will be reduced by a similar amount through the reduction of 20,000 positions across the entire U.S. network. Both of those cost reductions are directly tied to the separation from Amazon, UPS' largest customer. An additional 30% of the savings is attributed to lower fixed costs such as fewer buildings and support functions. 'United Parcel Service is contractually obligated to create 30,000 Teamsters jobs under our current national master agreement. If UPS wants to continue to downsize corporate management, the Teamsters won't stand in its way. But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight,' Teamsters President Sean O'Brien said in a statement responding to UPS' plan to take out 20,000 jobs. The shrinkage of Amazon volumes during the first half of 2025 tracks with expectations, the executive team said. Average daily volume decline is expected to accelerate to 30% in the second half after declining about 16% in the first half of the year. 'While our building footprint is changing, our pickup and delivery footprint is not. We remain committed to providing industry leading reliability to all customers across the country. We'll just do it with fewer buildings,' CEO Carol Tome said. 'For our larger customers, we are working with them to update their operating plan and for our [small and medium businesses] in the areas where we're closing buildings, UPS will still be accessible and convenient for customer dropoffs and pickups' through its retail stores, drop boxes and access points. At the end of the network restructuring, there will be 400 facilities that are partially or fully automated, said Nando Cesarone, president, U.S. operations. 'The end result will be a much more efficient operation with less dependency on labor,' he said. In addition to automating sort centers, UPS is studying the use of robotics for automatic label application, unloading and loading trailers, and other sort functions, Tome said. The efficiency programs combined with jettisoning unprofitable Amazon business gives management confidence it can hit its 12% target for U.S. operating margin, she added. UPS earlier this year also launched an efficiency drive aimed at redesigning internal processes that it estimates will save $1 billion by next year. Some analysts suggested UPS should be generating more savings from its restructuring. Investors were expecting $5 billion in savings over the next 18 months on top of previously announced cost take outs, Morgan Stanley analyst Ravi Shankar said in a client note. Management is essentially replacing the previous 2028 target of $4 billion in annual spending reductions ($3 billion from Network of the Future and $1 billion from the process efficiency initiative) with a three-year program 'of undisclosed size but with $3.5 billion coming in 2025 – making it very hard to tell how much' in incremental savings are still possible, he wrote. UPS results in the first quarter slightly beat analysts' expectations, which were lowered in recent weeks because of the turmoil in global markets caused by the U.S. government's aggressive global tariff policies. Revenue slipped 0.7% year over year to $21.5 billion, while adjusted operating profit inched up 1% to $1.7 billion. UPS did not provide updated full-year guidance because of the uncertain macroeconomic environment triggered by the U.S. government's aggressive global tariff policies. But projections in the second quarter are negative year over year. Revenue is expected to be $21 billion, down from $21.8 billion, with average daily domestic volume down about 9% year over year. International revenue will be down about 2% due to lower demand-related surcharges and tariff uncertainty. UPS' direct exposure to tariffs is limited. U.S. import volume is about 400,000 pieces per day, which represents less than 2% of total global average daily volume. China to the United States is the most profitable trade for UPS, representing 11% of total international revenue. Revenue from other countries to the U.S. is about 17% of total international revenue. During the first quarter, international revenue increased 2.7%, driven by a 7.1% increase in average daily volume. UPS said it saw demand for U.S. inbound service surge as customers pulled forward inventory purchases ahead of expected tariff changes. UPS expects weakening demand for U.S. imports from China, which faces tariffs of 145%, to be offset by growth on China-to non-U.S. trade lanes, as well as growth from other parts of the world to the U.S. It is running models for all types of scenarios so it can make operational adjustments as the year progresses. The company's top 100 customers are exploring a range of tactics to cope with tariffs, including absorbing the costs, passing them to consumers and asking suppliers to eat some of the increase, said Tome. The company has also surveyed nearly 45,000 freight forwarding customers, most of which said they are using existing inventory levels to support sales. Many large importers stockpiled merchandise 30 to 90 days earlier than usual to avoid the tariffs that kicked in earlier this month. The deferred orders are leading to lower shipping activity. Importers also say they are shifting more shipments from airfreight to ocean freight, where possible. 'We do see some volume deceleration in both enterprise and small and medium business, particularly in SMB, because they do not have the tools to deal with the changes that our enterprise customers do. That will put some pressure on revenue per package and margin,' Dykes said. Smaller companies don't have the working capital to pre-order inventory and have less ability to get contract manufacturers to switch to non-China countries than large retailers, Tome added. Online shoppers on Chinese platforms will experience huge price hikes on May 2, when the U.S. ends a tariff exemption for low-dollar shipments, triggering the 145% duties plus other processing costs. Temu and fast-fashion merchant Shein are showing consumers the import fees during checkout, and Amazon reportedly will do the same thing. UPS has long promoted its ability to make it easier for small businesses to engage in global trade by accessing its closed-loop global network, expertise and technology. It recently introduced a new tool for retailers called Global Checkout. It uses AI to assess items in the shopping cart and calculate the correct import duty, shipping and handling fees, and taxes at time of purchase Average domestic daily volume was lower than expected because of a pullback by some customers in response to tariff uncertainty created by the Trump administration. During the quarter, UPS completed the insourcing of its SurePost final-mile delivery product from the U.S. Postal Service and changed the name of its most economical shipping service to Ground Saver. Regaining full control of the product, which is primarily used by large retailers to ship goods to residences, gives UPS more operational flexibility and reliability with nearly no increase in cost after the Postal Service began to raise transportation prices. Tome said on-time delivery for Ground Saver was 97% during the first quarter. The parcel giant also reintroduced ground delivery with freight pricing for shipments greater than 150 pounds, offering parcel-like pricing for less-than-truckload shipments. UPS sold its UPS Freight business to TFI International four years ago. Domestic revenue grew 1.4%, driven by increases in air cargo and a 4.5% improvement in revenue per piece, which partially offset a decline in volume. The domestic segment increased operating profit by $164 million year over year. Average daily ground volume decreased 2.5% year over year, and total air volume was down 9.6%, in part because of the glide down in Amazon business. Excluding the volume decline from Amazon, total air average daily volume grew 6.2% driven by demand from health care and high-tech customers, UPS said. Revenue at Supply Chain Solutions fell 14.8%, primarily due to the sale of truck brokerage Coyote Logistics. Airfreight revenue was slightly lower year over year due to lower volume, which was more than offset by higher market rates in ocean. Last week, UPS announced an agreement to acquire Canadian logistics company Andlauer Healthcare Group Inc. for $1.6 billion as part of a strategic effort to focus on higher-margin business as parcel volumes decline. Click here for more FreightWaves/American Shipper stories by Eric Kulisch. UPS inks $1.6B deal for Canadian health care logistics provider FedEx, UPS lose parcel market share to big retailers, small couriers FedEx begins its first direct Singapore-US air cargo service Hongkong Post to stop handling US-bound packages amid tariff conflict The post UPS to eliminate 20K jobs as Amazon decoupling accelerates appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
01-05-2025
- Business
- Yahoo
Teamsters President: ‘UPS Will Be in for a Hell of a Fight' After Layoffs
The announcement from UPS that it would lay off 20,000 employees in 2025 generated some blowback from its largest union. The International Brotherhood of Teamsters, which represents more than 300,000 workers at the parcel delivery company, suggested in the hours after the call took place that it was ready to take legal action if any layoffs violate the terms of their current five-year contract. More from Sourcing Journal UPS Slashes 20,000 Jobs as it Weans Off Amazon Smarter, Greener, Stronger: How Tech is Driving Manufacturing Back to the US Chain Reaction: UniUni's Scott Wang on Building Smarter Supply Chains with AI and Automation 'United Parcel Service is contractually obligated to create 30,000 Teamsters jobs under our current national master agreement,' said Teamsters general president Sean O'Brien in a statement Tuesday afternoon. 'If UPS wants to continue to downsize corporate management, the Teamsters won't stand in its way. But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.' Two years ago, the Teamsters and UPS agreed to the contract after a contentious bargaining period that saw the 1.3-million-member union threaten to go on strike. As the bill from the contract racked up—UPS said it paid $1.4 billion more in compensation and benefits expenses in 2024 due to the deal—cuts had to be made elsewhere. The courier laid off 12,000 employees to start that year, with most of those roles coming from management, as well as some contractors. But those layoffs came along before last year's introduction of UPS' Network of the Future, the company's logistics network consolidation designed to flow more volume into automated warehouses. Under the plan, UPS is closing roughly 200 facilities, namely sortation centers. The company aims to close 73 sites this year. From a longer-term perspective, the automation push sows some concern into how many employees will get axed through the end of 2028, when the Network of the Future plan is expected to run its course. When news first broke out that UPS would temporarily shutter a package processing facility in Portland, Ore. on July 1 amid an automation deployment, Teamsters national vice president John Palmer admitted to The Oregonian that the union should have done a better job negotiating contracts that protect workers. 'If you're going to get displaced, based on your years of service there ought to be some sort of severance,' Palmer said. 'Automation is a real thing. There's only so much we can do to stop progress. But the other side of it is when you have a corporation like UPS that makes billions of dollars in profit every quarter.' Additionally, Palmer had suggested that the Teamsters should have sought a contract that promised longtime employees the chance to train for maintenance of automated sorting machines. The scenario in Portland is happening across dozens of facilities that are getting renovated to fully or partly incorporate automation. Reports of a possible brewing partnership with robotics startup Figure AI, in which UPS would use humanoid robots within its warehousing network, are likely to add insult to injury for the Teamsters. UPS never confirmed the partnership talks, or the use of a humanoid robot, but company brass hasn't been shy about admitting that the automation crusade is going to end up impacting jobs. 'The end result will be a much more efficient operation with less dependency on labor,' said Nando Cesarone, president U.S. at UPS, in Tuesday's earnings call. The UPS-Teamsters deal, which lasts through July 31, 2028, is supposed to create 30,000 Teamsters jobs, with 7,500 of them being full-time gigs. The master contract has no mention of automation or robotics. UPS isn't the only logistics player in the Teamsters' crosshairs. O'Brien took aim at another one of his common targets, Amazon, in a post on X Tuesday following the White House's blasting of the e-commerce giant for reportedly planning to show added tariff costs on consumer products. 'News flash: Amazon has ZERO allegiance to the United States. Decades after free trade politicians sold out American workers, Amazon has built an international empire fueled by industrial slavery managed by the Chinese Communist Party,' wrote O'Brien, in a reference to White House press secretary Karoline Leavitt's insistence that the company 'has partnered with a Chinese propaganda arm.' Amazon later denied that any tariff-displaying plans were in place. O'Brien's mini-rant came a week after a regional office of the National Labor Relations Board ruled Amazon must collectively bargain with Teamsters-affiliated warehouse workers at a San Francisco distribution center. 'While here in the U.S., it neglects, abuses, and disowns an American workforce to further inflate its profit margins,' O'Brien said in his post. 'What Jeff Bezos and Amazon are really afraid of is sharing their wealth with the people who created it. Hold Amazon accountable to American workers!'
Yahoo
30-04-2025
- Business
- Yahoo
UPS plans 20K job cuts this year as Amazon pullback advances
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. UPS plans to cut roughly 20,000 positions throughout its U.S. network in 2025 as the carrier moves forward with its plan to slash its Amazon volume by half, according to a Q1 earnings release Tuesday. The carrier also plans to close 73 facilities by the end of June due to the ongoing Amazon volume reduction but did not specify which locations would shut down. UPS is using lessons learned from its closure of 11 buildings in 2024 as a "blueprint" for the initiative, CEO Carol Tomé said on an earnings call following the announcement. The shakeup, which UPS referred to as its "Network Reconfiguration," is an expansion of the company's Network of the Future initiative, which is consolidating its operational footprint. UPS expects to realize $3.5 billion in cost savings from the efforts in 2025, about $500 million of which came in Q1, CFO Brian Dykes said on the call. UPS is working to match its U.S. network capacity with a planned decline in volume from its largest customer, resulting in large-scale staffing and building cuts. The company announced in January that the amount of volume it delivers for Amazon would drop by more than 50% by June 2026, driven by its aim to focus on more profitable packages. So far, UPS is making progress toward that goal. Amazon volume delivered by UPS declined 16% year over year in Q1, Dykes said. UPS is expecting another 16% volume drop from the e-commerce giant in Q2, followed by 30% volume declines in both Q3 and Q4. The volume reduction targets outbound shipments from Amazon's fulfillment centers, a delivery type that "is not profitable for us, nor a healthy fit for our network," Tomé said. The company is keeping more profitable returns volume and outbound shipments fulfilled by sellers, she added. "While this may be the largest network reconfiguration in our history, we've got experience that gives us confidence that we will be able to complete our plan with very little customer disruption and at the right cost to serve," Tomé said. UPS is working with its largest customers to adjust their operating plans in response to the 73 facility closures, according to Tomé. For smaller shippers reliant on buildings UPS is closing, Tomé highlighted the company's The UPS Store, Drop Box and Access Point locations. "Ninety percent of the U.S. population lives within five miles of these locations, and about two-thirds of them are open on Sunday for added convenience," Tomé said. As UPS trims its network footprint, it's relying more on hubs with automated sortation processes. Automated hubs currently handle about 64% of UPS' volume, up about 4.5% year over year, Dykes said. Amid this automation push, UPS' employee count has declined. UPS had about 490,000 employees at the end of 2024, down from 500,000 a year earlier, according to annual financial reports. Recommended Reading UPS to cut Amazon volume by more than 50%
