UPS is set to reduce its workforce by approximately 20,000 positions and close over 70 facilities, due to a sharp decrease in the volume of packages it handles for Amazon. This decision is part of a broader reconfiguration strategy in response to economic conditions and profit margins, as CEO Carol Tomé stated. UPS's recent agreement with Amazon entails cutting delivery volume by over 50% by 2026, reflecting their ongoing assessment of the partnership, which has been in place for nearly 30 years. Despite these challenges, UPS reported earnings of $1.19 billion for the recent quarter.
In January UPS announced that it had reached a deal with Amazon, its biggest customer, to lower its volume by more than 50% by the second half of 2026.
The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier, said CEO Carol Tomé.
It’s important to note that Amazon is our largest customer but it's not our most profitable customer, Tomé added.
The company employs about 490,000 workers, according to FactSet, indicating the scale of the impending job cuts.
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