United Parcel Service expects to cut 20,000 jobs this year and close dozens of facilities as it dramatically reduces shipments for e-commerce giant Amazon.
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UPS aims to
Amazon said in an emailed statement that UPS requested a reduction in volume "due to their operational needs." Amazon will "continue to partner with them and many other carriers to serve our customers."
UPS has about 490,000 employees, suggesting the planned contraction will account for 4% of its staff. The move comes after it announced 12,000 management job cuts in early 2024.
The courier has sought greater efficiency in the face of a decline in volumes following a pandemic-driven boom in e-commerce. The industry is also grappling with new challenges from President Donald Trump's tariffs, which have complicated cross-border goods shipments and injected volatility into the global economy. UPS on Tuesday backed away from its 2025 financial guidance, saying it wouldn't provide an update "given the current macroeconomic uncertainty."
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Still, the company reported adjusted earnings of $1.49 a share for the first three months of the year, topping the $1.40 average of analyst estimates compiled by Bloomberg. Revenue in the period also narrowly beat expectations.
The "better-than-feared" results were boosted by gains in both domestic and international package revenue, Stephanie Moore, a Jefferies analyst, said in a note.
UPS shares were little changed at 10:38 a.m. in New York. Its stock tumbled 23% this year through Monday's close.
Economic volatility
UPS and FedEx are viewed as barometers for the wider economy because their delivery networks span the industrial and retail sectors, providing insights into orders placed by manufacturers and consumers alike. Investors across industries have been looking for clues to the impacts of Trump's trade policies, which threaten to tip the economy into a recession.
UPS has been reworking its operations to shift away from low-margin parcels in favor of more profitable business lines. The company is working to position itself as a specialized logistics provider that can move higher-yield parcels such as temperature-controlled or urgent health-care shipments.
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It agreed last week to acquire Canada-based health-care logistics company Andlauer Healthcare Group for $1.6 billion. The move is the latest in a string of deals as the company seeks to reach $20 billion in health-care revenue by 2026.
While UPS didn't update its 2025 outlook, it said second-quarter revenue would come in around $21 billion. It previously predicted full-year revenue of about $89 billion and a full-year operating margin around 10.8%.
CEO Carol Tomé said on a conference call that the company would stand behind the 2025 guidance if conditions were to stabilize.
The decision not to update the annual forecast underscores the widespread uncertainty across corporate America after the Trump administration announced — and in some cases paused or adjusted — large tariffs on imports from other countries. Companies from American Airlines to footwear maker Skechers have pulled their outlooks, while UPS rival FedEx cut its outlook in March.
