UPS cutting 20,000 jobs amid reduction in Amazon shipments
UPS Tuesday announced that it will eliminate 20,000 jobs this year as part of a cost-cutting initiative that’s a follow-up to the delivery giant’s refusal to deliver so many packages for Amazon, its biggest customer.
The shipping firm, which has operations in more than 200 nations, has about 490,000 employees. The job cuts will affect barely more than 4% of its employees. This comes after UPS announced last year that it would be eliminating 12,000 jobs.
The move is one of the company’s efforts to consolidate UPS’s buildings and workers. Part of the job cuts, the company also disclosed that it would shut down 73 of its buildings by June 2025 and further added that it will also look to close other buildings.
“These steps will help us expand our U.S. Domestic operating margin and enhance profitability,” UPS Chief Financial Officer Brian Dykes stated on a Tuesday morning conference call.
In a Tuesday regulatory filing, UPS indicated that the reductions are in “in connection with our expectation of lowered volumes from our largest customer.” The company, which posted $21.5 billion in current-quarter revenue, hopes to realize $3.5 billion of savings this year through its plan of consolidation.
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As reported by Sean M. O’Brien, the Teamsters’ general president, as he outlined, UPS has a contractual obligation to create 30,000 Teamsters positions under their current national master agreement.
“If UPS is going to continue to retract corporate management, the Teamsters aren’t going to get in its way,” O’Brien said. “But if the company makes a move to bust our contract or attacks hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.”
“Strong” partnership with Amazon
The firm last week announced that it had negotiated with Amazon to reduce its volume of deliveries by over 50% during the second half of 2026.
“The package volume decrease from Amazon is something we decided to do as we prioritize revenue quality, and build domestic operating margin and profitability,” a UPS spokesman said in an email to CBS MoneyWatch.
Amazon responded in a letter to CBS MoneyWatch that the firm enjoys a “good working relationship” with UPS and that it had offered to increase UPS’ volumes prior to UPS deciding to decrease its Amazon shipments.
“Because of their business requirements, UPS asked for volume reduction and we abide by their decision entirely,” said Kelly Nantel, an Amazon spokesperson. “We’ll continue to work with them and with many other carriers to provide our customers.”
UPS delivers millions of packages globally yearly. Last year, the company averaged 22.4 million packages a day, or 5.7 billion for the year.
UPS stock dropped 55 cents, or 0.6%, to $96.61 in midday trading.
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FAQ:
1. Why is UPS laying off employees?
UPS is reducing its workforce by approximately 20,000 jobs due to a decline in shipping volume, partly caused by Amazon cutting back on its shipments. This reflects broader cost-cutting measures amid changing market demands.
2. How is Amazon connected to these layoffs?
Amazon, one of UPS’s largest customers, has been reducing its reliance on third-party carriers like UPS by expanding its own delivery network. This has led to fewer shipments handled by UPS, impacting revenue and staffing needs.
3. Are the layoffs only affecting UPS employees working on Amazon shipments?
While Amazon-related shipping reductions are a major factor, the layoffs may also involve other operational adjustments, including automation and efficiency improvements across UPS’s network.
4. When will these layoffs take place?
The job cuts are expected to be implemented in phases throughout [insert year, if known]. Affected employees will likely receive notifications based on regional and operational timelines.
5. What support is UPS offering laid-off workers?
UPS typically provides severance packages, career transition assistance, and retraining programs for eligible employees. Specific details may vary by location and role.
6. Will this impact UPS service quality or delivery times?
UPS states that operational changes aim to maintain service efficiency. However, customers may experience adjustments as the company reallocates resources.
7. Is Amazon planning to further reduce its use of UPS?
Amazon continues to prioritize its in-house logistics network, which could lead to further declines in UPS shipments. However, UPS is also diversifying its client base to mitigate reliance on any single customer.
8. Where can affected employees get more information?
UPS employees should check internal communications, contact HR, or visit the company’s employee support portal for updates.
