UPS plans to reduce its workforce by 20,000 positions this year and close 73 facilities by the end of June, the company announced with its first-quarter earnings report on Tuesday.
The job cuts will impact about 4% of UPS’s 490,000-person global workforce. UPS noted in the report that it expects to save $3.5 billion this year from the layoffs and facility closures. It projects spending between $400 million and $600 million in expenses this year.
UPS is cutting its workforce after announcing in January that it would be doing less business with Amazon, a company that accounted for nearly 12%, or about $1.07 billion, of its total revenue in 2024. UPS plans to slash more than half of the business it does with Amazon by June 2026, resulting in a substantial loss of revenue that UPS seeks to counter by shrinking its operations, per The Wall Street Journal.
Related: UPS Inked a Major Deal With the U.S. Postal Service — And Ended a 20-Year Relationship With FedEx
UPS CEO Carol Tomé stated in the earnings report that the layoffs position UPS to become “even stronger” and “more nimble” despite a challenging macroeconomic environment. According to Reuters, UPS faces a decline in volume from goods shipped by China-based sellers Shein and Temu after the U.S. implemented an up to 145% tariff on Chinese goods earlier this month. Shein has already raised prices as much as 377%.
“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” Tomé stated in the earnings report.
UPS last conducted layoffs in January 2024, when the company eliminated 12,000 roles and mandated that workers return to the office five days per week.
The shipping giant reported its first-quarter results on Tuesday. Revenue for the quarter was $21.5 billion, down 0.7% from the same time last year but higher than Wall Street’s expectations of $21 billion. UPS’s revenue in the U.S. increased by 1.4% in the first quarter to $14.46 billion. The growth was mainly driven by increases in air cargo, which offset a decline in the volume of shipments.
UPS had a market capitalization of over $82 billion at the time of writing. The company says it delivers 22.4 million packages every day.
Related: FedEx and UPS Are Slashing Prices to Win Your Business: ‘No Customer Is Too Small’
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