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Newsweek
30-04-2025
- Business
- Newsweek
Are UPS Layoffs Because of Trump's Tariffs? What We Know
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. United Parcel Service has said it will be cutting 20,000 jobs and shutting 73 buildings, as UPS highlighted the "highly uncertain" trading environment in which it is now operating. However, the company said that the decision was driven by the increasing automation of its production facilities, as well as a decline in shipping volume due to its Amazon "glide down" plan unveiled in late January. Newsweek has reached out to UPS via email for comment. Why It Matters UPS is the largest courier in the U.S. and ranks among the country's top companies by revenue, having generated $91.1 billion last year. As a major player in the global logistics industry, the company said that the administration's trade policies will demand greater adaptability and strategic oversight in the near-future, but that it remains confident in its ability to navigate the evolving conditions. What To Know The announcement came alongside the release of the company's first-quarter earnings. UPS saw a Consolidated Revenues of $21.5 billion, down from $21.7 billion a year prior. In the release and subsequent earnings call, UPS executives gave several reasons for the decision to shutter 73 U.S. buildings and lay off 20,000 workers, which is in addition to the 12,000 it said it would be cutting last year. The company said that the latest moves comprised part of its ongoing "Network Reconfiguration and Efficiency Reimagined" initiative, aimed at streamlining the business "through automation and operational sort consolidation in our U.S. Domestic network." UPS said that it expects this to result in $3.5 billion of total cost savings in 2025. In a call following the results, Executive Vice President Nando Cesarone said that UPS plans to incorporate automation across its facilities, with 400 becoming partially or fully automated by the end of this process. This, alongside the application of artificial intelligence, will result in a "much more efficient operation with less dependency on labor," Cesarone said. File photo: A United Parcel Service Inc. (UPS) truck is parked at a distribution center on April 4, 2025 in San Diego, California. File photo: A United Parcel Service Inc. (UPS) truck is parked at a distribution center on April 4, 2025 in San Diego, Financial Officer Brian Dykes added that the planned layoffs and building closures were "in line with the total Amazon volume decline." In January, UPS announced a "glide down" plan to cut transported order volumes with the e-commerce giant "more than 50 percent by the second half of 2026." During the first quarter, Dykes said that package volume from Amazon had already declined by 16 percent, adding that this "was more than we originally planned." However, CEO Carol Tomé added: "Sixty percent of the volume that we're gliding down is not profitable for us, and by gliding that down, we actually give ourselves financial flexibility to address other scenarios that might come our way." While the company did not attribute the layoffs or business closures to tariffs directly, Tomé said that the need for adaptability and efficiency had been heightened by the administration's trade policies. U.S.-China trade lines comprised around 11 percent revenue in 2024, the company said, making it the UPS's most profitable trading route. However, it expects any weakening demand due to the high tariffs on China to be "partially offset" by growth in China to non-U. S. lanes, as well as more goods being shipped to the U.S. from other countries. What People Are Saying UPS CFO Bryan Dykes, during Tuesday's earnings call, said: "The macro environment is highly uncertain due to changing trade policy and tariff uncertainty. As a global carrier, the eventual outcomes could result in pressure in some parts of our business and create new opportunities in others. "We've modeled several different scenarios for how the balance of the year might play out so that we can quickly pivot, continue supporting our customers, and lean into growth." UPS CEO Carol Tomé said that many of the company's small- and medium-sized business customers are "100 percent single-sourced from China," and that the 145-percent tariffs on Chinese goods was "causing so much uncertainty in the marketplace." "If we go back to 2018 when China tariffs were imposed, we saw trade move, China to U.S. decline, but China the rest of the world increased, and it all leveled out and our international business actually grew," Tomé said. "So because of our integrated network and our [global] presence, we'll be able to manage through this." The International Brotherhood of Teamsters, a labor union representing an estimated 300,000 UPS hourly workers, said in response to the layoff announcement: "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." What Happens Next UPS said that the layoffs would take place over the course of 2025, while the 73 buildings were scheduled for closure by June. "We are continuing to review our network and may identify additional buildings for closure," it added. CEO Carol Tomé said UPS would not be updating its full-year outlook "given today's level of uncertainty." "Once we are through the second quarter, we will hopefully have more clarity about tariffs and trade and the implications for demand dynamics, and we'll provide an update at that point," she added. CFO Bryan Dykes said that international revenue is expected to fall around 2 percent from 2024, "due to lower demand-related surcharges and trade uncertainty."
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 $$1.40 per share, in the quarter ended March 31. Stripping out certain items, earnings were $1.49 per share. That's better than the $1.44 per share that analysts polled by Zacks Investment Research were calling for. Revenue totaled $21.55 billion, beating Wall Street's estimate of $21.06 billion. UPS said that it wasn't providing any updates to its previously announced full-year outlook, given current macroeconomic uncertainty. The company previously said that it expected 2025 revenue of approximately $89 billion. Shares of UPS rose slightly in morning trading.
Boston Globe
29-04-2025
- Business
- Boston Globe
UPS to cut 20,000 jobs, close some facilities as it reduces amount of Amazon shipments it handles
In January UPS announced that it had reached a deal with Amazon, its biggest customer, to lower its volume by more than 50% by the second half of 2026. Advertisement During UPS' fourth-quarter earnings conference call in January, Tomé said that the company had partnered with Amazon for almost 30 years and that when its contract came up this year, UPS decided to reassess the relationship. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up 'Amazon is our largest customer but it's not our most profitable customer,' Tomé said at the time. 'Its margin is very dilutive to the U.S. domestic business.' Tomé said that UPS considered various options and determined that the volume reduction was the best alternative. The company employs about 490,000 workers, according to FactSet. United Parcel Service Inc. also reported its first-quarter financial results on Tuesday. The Atlanta-based company earned $1.19 billion, or $$1.40 per share, in the quarter ended March 31. Advertisement 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.
Toronto Star
29-04-2025
- Business
- Toronto Star
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 Inc. The reduction in its operational workforce — a group that includes delivery drivers and package handlers — is part of a network overhaul in response to expected 'lower volumes from our largest customer,' 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.
29-04-2025
- Business
UPS to cut 20K jobs, close some facilities as it reduces Amazon shipments it handles
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.
