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UPS has said it will cut 20,000 jobs this year and close more than 70 buildings as the logistics group seeks to reduce costs and prepare for a halving in package volume from Amazon, its biggest customer.
The job cuts will target workers responsible for delivering packages to customers and supporting the company’s transportation and logistics services, and come after the group last year cut about 14,000 jobs, primarily in management roles.
The latest reduction in headcount is part of UPS’s plan to boost efficiency and consolidate its US domestic network after the company said in January it had reached an agreement in principle with its “largest customer” to lower its volume by the second half of 2026.
Amazon accounted for 12 per cent of UPS’s $91bn in revenue during 2024, according to the delivery company’s 10-K filing, mostly in the group’s US domestic package segment. Its own parcel volumes now rival those of UPS and FedEx.
In explaining the decision in January to reduce its business with the ecommerce group, UPS chief executive Carol Tomé told analysts: “Amazon is our largest customer, but it’s not our most profitable customer. Its margin is very dilutive to the US domestic business.”
In an effort to align its network with the coming decline in business from Amazon, UPS said on Tuesday it also expected to close 73 leased and owned buildings in 2025. The company had previously indicated it would need to reduce its aircraft and vehicle fleets, too.
The Atlanta-based company has about 490,000 employees globally, with almost 83 per cent of those based in the US, according to the group’s latest filing.
UPS said it expected $3.5bn of cost savings in 2025 from its plan and that it expected $400mn to $600mn of expenses this year related to early asset retirements, lease-related costs and employee separation benefits.
“[T]he 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,” Tomé said in a statement on Tuesday as the company reported results.
For the first three months of 2025, UPS reported net income of $1.2bn on a smaller than expected drop in revenue to $21.5bn, but declined to update its outlook for the year owing to macroeconomic “uncertainty”.
UPS shares were down 1 per cent in pre-market trading on Tuesday.
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