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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 layoffs: 20,000 jobs cut, 73 locations to close as company cites less Amazon business and tariff uncertainty
United Parcel Service (UPS) said on Tuesday it will slash 20,000 jobs and close more than 70 facilities to lower costs as it braces for less Amazon shipments, due to global economic uncertainty and changing consumer habits. Big Lots stores reopening update: Here's the full list of locations that will open this week Joann fabrics store closing dates: Here's the full list of locations that will close for good this week What's behind the rise in interim CEOs The package delivery company said in addition to the job cuts, it would shut at least 73 owned and leased locations this year by the end of June, perhaps more, and expects to save $3.5 billion in 2025 from the cost-cutting measures. UPS' first-quarter revenue fell slightly to $21.5 billion, but the company still beat Wall Street earnings expectations of $21.05 billion, according to the data firm London Stock Exchange Group (LSEG), per Reuters. Shares of the company (NYSE:UPS) rose nearly 2% before the market opened on Tuesday. The stock was down less than 1% in midday trading at the time of this writing. It's worth noting that news of UPS decreasing its Amazon shipments follows similar earnings guidance from last quarter. In January, the company announced a deal with its largest customer to lower its volume by more than 50% by the second half of 2026. (In 2024, accounted for 11.8% of UPS's overall revenue, according to CNBC.) 'As a trusted leader in global logistics, we will leverage our integrated network and trade expertise to assist our customers as they adapt toa changing trade environment,' UPS CEO Carol Tomé said in a statement, likely alluding to the current economic uncertainty and potential for slowing trade as a result of the Trump Administration's sweeping tariffs. 'The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS,' Tomé added. 'The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier.' Like many other companies who have declined to provide a full financial forecast during recent earnings calls, due to the rapidly changing economic landscape, UPS did not provide an update to its full-year outlook on its earnings call. This post originally appeared at to get the Fast Company newsletter: Sign in to access your portfolio
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%
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
Hindustan Times
29-04-2025
- Business
- Hindustan Times
UPS to slash 20,000 jobs, close some facilities amid reduced Amazon shipments
UPS is looking to slash about 20,000 jobs and close more than 70 facilities as it drastically reduces the amount of Amazon shipments it handles. The package delivery company said Tuesday that it anticipates making the job cuts this year. It anticipates closing 73 leased and owned buildings by the end of June. UPS said that it is still reviewing its network and may identify more buildings to be shuttered. 'The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,' CEO Carol Tomé said in a statement on Tuesday. "The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.' In January UPS announced that it had reached a deal with Amazon, its biggest customer, to lower its volume by more than 50% by the second half of 2026. During UPS' fourth-quarter earnings conference call in January, Tomé said that the company had partnered with Amazon for almost 30 years and that when its contract came up this year, UPS decided to reassess the relationship. 'Amazon is our largest customer but it's not our most profitable customer,' Tomé said at the time. 'Its margin is very dilutive to the U.S. domestic business.' Tomé said that UPS considered various options and determined that the volume reduction was the best alternative. The company employs about 490,000 workers, according to FactSet. United Parcel Service Inc. also reported its first-quarter financial results on Tuesday. The Atlanta-based company earned $1.19 billion, or $$1.40 per share, in the quarter ended March 31. Stripping out certain items, earnings were $1.49 per share. That's better than the $1.44 per share that analysts polled by Zacks Investment Research were calling for. Revenue totaled $21.55 billion, beating Wall Street's estimate of $21.06 billion. UPS said that it wasn't providing any updates to its previously announced full-year outlook, given current macroeconomic uncertainty. The company previously said that it expected 2025 revenue of approximately $89 billion. Shares of UPS rose slightly in morning trading.
