UPS To Cut 20,000 Jobs, Close 73 Facilities Amid Amazon Delivery Pullback And Cost Cuts

UPS announced on Tuesday its plans to eliminate 20,000 jobs this year as part of a broader cost-reduction initiative. This strategic decision follows the company's move to scale back its package deliveries for Amazon, its largest customer.

UPS Plans More Layoffs And Facility Closures

Operating across more than 200 countries, UPS currently employs approximately 490,000 people. The upcoming UPS layoffs will affect just over 4% of the global workforce. This follows a previous round of job cuts in 2023, when the company reduced its headcount by 12,000.

As part of its ongoing restructuring efforts, UPS also revealed plans to close 73 buildings by June 2025. The company indicated that additional closures could be considered, CBS News reported.

"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," CEO of UPS Carol B. Tomé said.

Job Cuts Tied To Drop In Amazon Deliveries; Union Warns UPS Against Violating Labor Contract

In a regulatory filing submitted on Tuesday, UPS attributed the planned job cuts to anticipated declines in package volumes from its largest customer. The company reported $21.5 billion in revenue for the most recent quarter and projects savings of $3.5 billion this year through its consolidation efforts.

Meanwhile, the International Brotherhood of Teamsters highlighted that UPS is contractually bound to create 30,000 union jobs under the existing national master agreement.

The union indicated it would not oppose reductions in corporate management positions but signaled strong resistance if the company's actions threaten union-protected roles or breach contractual obligations.

"If UPS wants to continue to downsize corporate management, the Teamsters won't stand in its way," Sean M. O'Brien, General President of the International Brotherhood of Teamsters, said. "But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight."

UPS Reports Strong Earnings But Stays Cautious About Future Due To Economic Uncertainty

On the same day, the company reported first-quarter earnings of $1.19 billion, or $1.40 per share. Adjusted earnings reached $1.49 per share, surpassing analyst expectations of $1.44. Revenue came in at $21.55 billion, also beating the projected $21.06 billion.

Despite the positive results, UPS did not update its full-year forecast, citing ongoing macroeconomic uncertainty. It previously projected 2025 revenue of about $89 billion. UPS shares saw a modest increase in morning trading.

Originally published on IBTimes