UPS has cut 20,000 jobs, or 4% of total workforce this year, as the enormous power of package distribution gives it that power. Decoupling with Amazon.
Courier layoffs are a side effect of the company Future Network The plan is intended to be more dependent Automatic processes in warehouses We will integrate sorting facilities. In addition to 20,000 job closures, 73 leases and property buildings will be closed by June. The company expects to cut total costs by $3.5 billion through these measures.
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In a revenue call Tuesday, UPS Chief Financial Officer Brian Dykes said the restructuring coincides with the expected reduction in Amazon volume in 2025.
UPS was already hoping to cut Amazon’s movement by 50% by the second half of 2026. According to Dykes, in the first quarter, Amazon Amazon average daily volume (ADV) fell 16% year-on-year. ADV is projected to be the same decline in the second quarter.
In the second half of 2025, we should see a sharp decline of around 30% in each quarter.
Amazon accounted for 11.8% of UPS revenue in 2024, but the latter aims to separate the e-commerce giant as partnerships place a strong focus on profit margins.
In the first quarter, UPS generated revenue of $21.5 billion, down 0.7% from the same period last year, with net profit of $1.2 billion, up 7% from the previous year’s $1.1 billion.
Everyday volume across the country fell 3.5% to 17.4 million packages, while overall package volume around the world fell 1.9% to 20 million compartments.
“Quarterly volume and revenue performance was in line with our expectations, but our monthly performance wasn’t,” Dykes said. “In the US, following a strong January in January compared to our expectations, market uncertainty began to affect consumer behavior. Demand fell in February, further downwards than expectations and normal shipping patterns, staying at that level in March.”
Like many public companies navigating the current geopolitical environment, UPS does not provide year-round guidance.
During the call, UPS said the business is expected to generate $21 billion in revenue and generate an operating profit margin of around 9.3% in the second quarter. This is a 3.7% decrease from $21.8 billion brought in over the previous year, but above the margin of 8.9% last year.
However, uncertainties related to tariffs It was imposed on the Trump administration The US domestic business is expected to fall 9% in ADV, with domestic revenues expected to immerse themselves in low single-figure digits. SMB is “disproportionately affected,” Dykes said.
“Many of our SMBs are 100% singles that many of us when we talk to them are sourced from China,” CEO Carol Tome said over the phone. 145% tariff Exclusion from China’s imports Minimum exemption. “Our SMBs, who don’t have the working capital capabilities to pull out forward inventory, say, “How do you handle this increase in costs?” ”
Tome noted that these companies are seeking alternative supply forms and are working with the original equipment manufacturers looking to move to other countries. However, she admitted that “big companies can get their first call.”
UPS’ exposure to China is around 400,000 import packages per day, less than 2% of all global ADVs, while revenues from the US trade lanes from China were 11% of total international revenue.
“Our US trade lanes from China are our most profitable trade lanes,” Tome said. Impact of Trump’s trade policy. “These customers say they are exploring a range of options to address fees, from absorbing costs to pushing them into retail prices, to seeking suppliers to help them pay for costs.”
In the call, Dykes also said it is assessing it to close about 50 more warehouses as UPS continues to consolidate its network. According to Dykes, 64% of the UPS volume has passed through the automatic hub, earning 4.5% points from the previous year.
The revenue report said the day after Bloomberg was in discussions to use humanoid robots within its warehouse networks, the next day during discussions to partner with robotics startup figure AI.
“It’s not just about automating, it’s about automating sorting,” said Tome, who didn’t confirm the partnership. “We use many other automated opportunities, such as using robotics for automated labeling applications and unloading and loading trailers.”
Nando Cesarone, president of UPS, said the ultimate goal is to have 400 full or semi-automatic warehouses; 200 Facilities It is scheduled to close by 2028.
“We’ve introduced into these businesses as new automation technologies that apply AI in certain areas to help labor, which really helps us take costs away from our network,” says Cesarone. “The end result is less dependent on labor and much more efficient operations.”
As of the company’s annual report released in March, UPS had a total of 490,000 employees, except for temporary seasonal employees. Over 75% of the 406,000 US employees incorporate unions; Team Star Or the Independent Pilot Association.
The stock was barely affected by the layoffs and fell 0.4% by noon Tuesday.
