Photo: UPS
Express giant UPS has announced it will cut around 20,000 jobs as a result of its decision to reduce its business with e-commerce platform Amazon.
While announcing its first quarter results, the company revealed its plans to reduce headcount, saying the move could save around $3.5bn, in combination with closing 73 owned and leased buildings.
One of the reasons given for the job cuts was the decision to reduce its business with Amazon by 50% by the second half of 2026 as part of efforts to improve profitability.
”In connection with our anticipation of lower volumes from our largest customer, we began our Network Reconfiguration, which is an expansion of Network of the Future and will lead to consolidations of our facilities and workforce as well as an end-to-end process redesign,” the company said.
”We launched our Efficiency Reimagined initiatives to undertake the end-to-end process redesign effort, which will align our organisational processes to the network reconfiguration.
”We expect to reduce our operational workforce by approximately 20,000 positions during 2025 and close 73 leased and owned buildings by the end of June 2025.”
UPS chief executive Carol Tomé further explained: ”The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”
During the quarter, the company saw revenues fall by 0.7% year on year to $21.5bn primarily as a result of its decision to sell Coyote Logistics. Operating profit was up 3.3% year on year to $1.7bn and net income improved by 6.6% to $1.2bn.
Looking at divisional performance, US Domestic Package revenues improved by 1.4% to $14.5bn, while operating profits were up 17.5% to $979m.
The revenue increase was driven by increases in air cargo and a 4.5% improvement in revenue per piece, partially offsetting a decline in volumes.
International Package revenues improved by 2.7% to $4.4bn and operating profits decreased 2.3% to $641m.
The revenue increase was driven by a 7.1% improvement in average daily volume.
Supply Chain Solutions revenues slipped 14.8% to $2.7bn and operating profits slid 62.9% to $46m.
The revenue decline was primarily due to the divestiture of Coyote.
Given the current macroeconomic uncertainty, the company did not provide any updates to its previously issued consolidated full-year outlook.
