UPS to Cut 20,000 Jobs Amid Shift from Amazon Shipments
UPS announces plans to reduce workforce by 20,000 and close 73 facilities as it cuts Amazon shipping volume significantly.
Overview
UPS is set to cut around 20,000 jobs and close 73 facilities by June 2025 as it reduces its handling of Amazon shipments, which is expected to decrease by over 50% by 2026. CEO Carol Tomé stated the measures aim to adapt to economic changes, with the job cuts and closures projected to save the company $3.5 billion in 2025. UPS reported a revenue of $21.55 billion in Q1, surpassing estimates, and plans to automate operations across 400 facilities. The actions reflect an ongoing reassessment of its relationship with Amazon and the impact of global trade challenges.
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Analysis
- UPS plans to cut approximately 20,000 jobs in 2025 and close 73 facilities as part of a strategy to reduce its reliance on Amazon, its largest yet least profitable customer.
- The company aims to save about $3.5 billion through these moves, which are essential to adapt to changing economic conditions and increase operational efficiency.
- Despite recent job losses and facility closures, UPS remains optimistic about its long-term growth, citing the need for network reconfiguration and efficiency improvements as timely and necessary.
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The 20,000 job cuts represent approximately 4% of UPS's workforce, which stands at about 490,000 employees.
UPS reassessed its relationship with Amazon, stating Amazon is its largest customer but not the most profitable, as its margins are 'very dilutive' to UPS's U.S. business.
Amazon accounted for 11.8% of UPS's overall revenue in 2024.
UPS projects $3.5 billion in total cost savings from these measures in 2025.
UPS plans to close 73 leased and owned facilities by the end of June 2025, with potential additional closures still under review.
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