UPS Plans Significant Workforce Reductions and Facility Closures Amidst Amazon Shipment Cutbacks

United Parcel Service (UPS) has announced plans to reduce its workforce by approximately 20,000 positions and close over 70 facilities as part of a strategic shift to decrease its volume of Amazon shipments. The decision comes as UPS anticipates making these job cuts within the current year, with plans to shut down 73 leased and owned buildings by the end of June. The company has indicated that it is still evaluating its operational network, which may lead to additional closures.

In a statement, the UPS CEO expressed confidence that these measures to realign the company's network and reduce costs are timely. The current macroeconomic environment remains unpredictable, but UPS aims to emerge from these adjustments as a more agile and resilient organization.

Earlier this year, UPS reached an agreement with Amazon, its largest customer, to significantly reduce shipment volume by more than 50% by the second half of 2026. This decision marks a pivotal reevaluation of their longstanding partnership, which has lasted nearly three decades. The CEO noted that while Amazon is a major customer, it is not the most profitable, citing that the margins from this business segment have been dilutive to UPS's domestic operations.

Following the announcement of the job cuts and facility closures, the company also disclosed its financial results for the first quarter, reporting a profit of $1.19 billion, or $1.40 per share, for the period ending March 31. When adjusted for specific items, earnings reached $1.49 per share, exceeding analysts' expectations. Additionally, UPS's revenue for the quarter totaled $21.55 billion, surpassing Wall Street's forecast.

Despite the positive financial results, UPS refrained from updating its full-year revenue outlook due to ongoing economic uncertainty. Previously, the company had projected 2025 revenue to be approximately $89 billion. In the wake of these announcements, UPS shares experienced a slight increase in morning trading, reflecting investor response to the financial performance amid operational changes.