UPS Announces 20,000 Job Cuts Amid Shift to Automation and Reduced Amazon Business

UPS plans to cut 20,000 jobs, about 4% of its global workforce, due to increased use of technology and a previously announced plan to trim its Amazon business. The decision is unrelated to tariffs, despite the company seeing some effects from Trump's broad tariffs on imports. UPS expects to use more automation in its facilities and close 73 US buildings by June. The company forecasts its revenue will fall in the second quarter compared to last year, but has not dropped its full-year guidance.

United Parcel Service (UPS) has announced a substantial reduction in its workforce, with plans to cut approximately 20,000 jobs and close 73 facilities by June 2025. This move is part of the company's broader strategy to enhance its technological capabilities and streamline operations [1][2].

The job cuts, representing about 4% of UPS's global workforce, are expected to take effect as part of the company's "Network of the Future" plan. This initiative aims to make UPS more reliant on automated processes within warehouses and consolidate sorting facilities. The company anticipates a total cost savings of $3.5 billion through these measures [2].

The decision to reduce its workforce and close facilities is not directly related to tariffs, despite UPS experiencing some impact from Trump's broad tariffs on imports. The company has cited increased use of technology and a previously announced plan to trim its Amazon business as the primary reasons for the layoffs [1][2].

UPS's CEO, Carol Tomé, emphasized the company's commitment to leveraging its integrated network and trade expertise to assist customers in adapting to a changing trade environment. She also noted that the actions taken to reconfigure the network and reduce costs are timely and necessary for the company to emerge stronger and more nimble [1].

The company has forecast that its revenue will fall in the second quarter compared to last year, but it has not dropped its full-year guidance. UPS's domestic daily volume slipped 3.5% to 17.4 million packages in the first quarter, dragging down the overall worldwide package volume to a 1.9% dip to 20.8 million parcels [2].

UPS's stock price has been largely unaffected by the layoffs, inching down by 0.4% by noon Tuesday. The company continues to evaluate approximately 50 more warehouses to close as it progresses with its network consolidation efforts [2].

References:

[1] https://www.denver7.com/politics/economy/ups-announces-job-cuts-and-facility-closures-as-amazon-reduces-volume
[2] https://finance.yahoo.com/news/ups-slashes-20-000-jobs-162457693.html

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