Topline
UPS announced Tuesday it would lay off 20,000 workers this year, despite beating first-quarter profit estimates, as the shipping giant expects a decline in deliveries after cutting its shipments for Amazon in half earlier this year.
The shipping giant halved its deliveries for Amazon earlier this year.
Key Facts
UPS expects to save $3.5 billion in 2025 after cutting 20,000 jobs and closing 73 leased and owned buildings by the end of June, the company announced in its first-quarter earnings report.
The layoffs and building closures follow what UPS said is “anticipation of lower volumes from our largest customer,” Amazon, which UPS announced in January would have its shipping volume with the company cut in half by 2026.
UPS—whose shares rose about 1% in premarket trading on Tuesday—reported first-quarter revenue of $21.5 billion and an adjusted profit per share of $1.49, beating analyst expectations of $21.05 billion and $1.38, according to FactSet.
The shipping giant pulled its full-year guidance, despite earlier forecasting revenue of $89 billion for its current fiscal year, while citing the “current macro-economic uncertainty.”
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Big Number
11.8%. That’s the percentage of UPS’ overall revenue that Amazon shipments accounted for in 2024, the company said.
Key Background
The latest layoffs at UPS follow the company’s announcement in January it would cut most of its business with Amazon. At the time, UPS projected a decline in revenue for 2025 as CEO Carol Tome said it was “time to step back for a moment and reassess our relationship” with Amazon. The company’s decision to reduce shipment volume from Amazon will allow UPS to expand its profit margins, Tome said in the company’s 2024 fourth-quarter earnings call. “Amazon is our largest customer, but it’s not our most profitable customer,” Tome said. UPS announced in January 2024 the company would cut 12,000 employees, after Tome said UPS experienced a “difficult and disappointing” 2023.
Further Reading
