In a concerning development, UPS is set to deploy a sweeping strategic overhaul by slashing 20,000 jobs and shuttering 73 facilities across America.
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United Parcel Service announced on April 29, 2025, their plan to reduce 20,000 jobs and close over 70 facilities, responding to declining shipment volumes, particularly those tied to Amazon.
This sweeping measure indicates a major shift in UPS’s operational strategy as it aims to reposition itself amid uncertain economic conditions.
The job cuts, which make up approximately 4% of UPS’s workforce, highlight a significant organizational pivot.
The logistics giant, employing about 490,000 workers, is responding to a new deal with Amazon that reduces shipment volumes by over 50% by the second half of 2026.
This restructuring is expected to cut $3.5 billion in expenses next year.
“Amazon is our largest customer but it’s not our most profitable customer,” said CEO Carol Tomé, cited by ABC News.
UPS generated impressive first-quarter earnings, surpassing analyst expectations with adjusted earnings of $1.49 per share, and a revenue total of $21.55 billion.
Despite these figures, UPS shares saw a slight increase during morning trading, reflecting a cautious market perspective amidst global trade concerns.
“The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS,” Tomé said further.
UPS’s aggressive restructuring is a proactive response to macroeconomic uncertainty and a reduction in shipping volumes from Amazon, whose revenue contribution was 11.8% in 2024.
The targeted facility closures, slated for completion by June 2025, suggest UPS’s commitment to reducing reliance on a single customer amidst broader economic changes.
Long viewed as a logistics powerhouse, UPS plans to stabilize revenue and diversify its portfolio post-Amazon by leveraging its expansive network and trade expertise.
CEO Tomé remains confident in the company’s ability to adapt to a rapidly changing trade environment, stating, “By gliding that down, we actually give ourselves financial flexibility to address other scenarios that might come our way.”
Nonetheless, the impending workforce reductions pose questions about UPS’s future workforce morale and its capacity to balance operational efficiency with employee welfare.
As UPS continues adjusting to economic shifts, the coming months could reveal how these radical changes impact its dominance in the logistics sector.
UPS on Tuesday announced it is planning to cut 20,000 jobs, part of a cost-cutting effort that's linked to fewer deliveries from Amazon, its biggest customer. https://t.co/KxVHWXAFGY
— CBS News (@CBSNews) April 29, 2025
