United Parcel Service (UPS), a leading package delivery company, announced plans to cut approximately 20,000 jobs and close over 70 facilities as it significantly reduces the volume of Amazon shipments it manages. This strategic move comes as part of UPS's efforts to streamline operations and adapt to changing market dynamics. The company revealed these plans on Tuesday, indicating that the job cuts are expected to occur within this year.
UPS has stated that it anticipates closing a total of 73 leased and owned buildings by the end of June. Furthermore, the company is actively reviewing its operational network, which may lead to additional closures in the future. CEO Carol Tomé emphasized the necessity of these actions, saying, “The actions we are taking to reconfigure our network and reduce costs across our business could not be timelier.” She added that despite the uncertain macro environment, these strategic changes will position UPS for greater strength and agility.
Earlier this year, UPS announced a pivotal agreement with Amazon, its largest customer, which entails a reduction in shipment volume by over 50% by the second half of 2026. During a fourth-quarter earnings conference call in January, Tomé highlighted the long-standing partnership with Amazon, which has spanned nearly 30 years. However, she noted that upon reassessing the relationship, UPS decided to pivot away from relying heavily on this volume due to profitability concerns. As Tomé stated, “Amazon is our largest customer but it’s not our most profitable customer. Its margin is very dilutive to the U.S. domestic business.”
UPS also reported its first-quarter financial results on Tuesday, revealing earnings of $1.19 billion, or $1.40 per share, for the quarter ending March 31. After adjusting for certain items, the earnings stood at $1.49 per share, surpassing analysts’ expectations of $1.44 per share, according to a poll by Zacks Investment Research. The company generated $21.55 billion in revenue, exceeding Wall Street's forecast of $21.06 billion.
Despite the positive financial results, UPS has chosen not to update its previously announced full-year outlook, citing ongoing macroeconomic uncertainties. The company has projected a revenue of approximately $89 billion for the year 2025. Following the announcement of these changes, shares of UPS experienced a slight increase during morning trading.
As UPS navigates these significant changes, the company is poised to emerge as a leaner, more efficient player in the logistics and delivery market, ready to tackle future challenges head-on.
