UPS to eliminate 20K jobs as Amazon decoupling accelerates

Executive officials said on Tuesday during the bridles of profits in the first quarter that UPS plans to get rid of about 20,000 jobs in the front line in 2025, running the decrease in unbelievable business from Amazon and a huge restructuring of its connection network.

In January, the integrated giant of expulsion and logistics reached an agreement to reduce Amazon sizes in its network by more than 50 % by June 2026. External delivery operations from the Amazon loyalty centers are not profitable compared to revenue and external folders from retailers selling in the Amazon market. About 60 % of Amazon works in UPS is the loss of loss.

Meanwhile, ups (New York: UPSOne year ago, it announced an aggressive strategy to unify the network and automation aimed at improving profitability by better conformity and employment with low parcel sizes. The administration told analysts on Tuesday that the Amazon transmission plan was taken into account in reshaping the company’s network.

The improvement plan, called the Future Network, imagines the closure of 200 sorting centers for five years. Brian Dix financial director, in the first phase of the program, including 73 buildings by the end of June, said that UPS intends to close 164 operating transformations in the first stage of the program, including 73 buildings by the end of June. The company revealed, for example, plans to temporarily close a facility in Portland, Oregon, this summer to enable renovations.

Dix said the initiative is expected to eliminate $ 3.5 billion expenses this year alone.

About 35 % of the savings will come from the execution of 25 million hours of operation through the workforce. Semi -variable costs will be reduced by a similar amount by reducing 20,000 jobs via the entire American network. Each of these cost discounts is directly related to the separation from Amazon, the largest UPS agent. An additional 30 % of savings is due to low fixed costs such as a fewer buildings and support functions.

“The United Part Service is binding on a contract to create 30,000 jobs from the team under the current National Master’s Agreement. If UPS wants to continue to reduce the size of corporate management, the Teamstrers team will not stand on its way. But if the company violates our contract, then any attempt to monitor stipulated, it will take the exciting teams to carry out wrapped by those connected to statements.

The executive team said that the contraction of the Amazon sizes during the first half of 2025 paths with expectations. The average daily size decrease will accelerate to 30 % in the second half after a decrease of about 16 % in the first half of the year.

“Although our construction fingerprint is changing, our receipt and delivery is not. We are still committed to providing a leading reliability in industry for all customers throughout the country. We will do so with a number of buildings,” said Carol Tommy, CEO. “For our largest customers, we work with them to update their operating plan and our product [small and medium businesses] In the areas where we close the buildings, UPS will remain available and comfortable for customer capacities and capacities “through retail stores, dropping boxes and arrival points.

At the end of the network restructuring, there will be 400 partly or completely automatic facilities. “The end result will be a more efficient process with less dependence on labor,” he said.

In addition to the automation of the screening centers, UPS is studying the use of robots to apply automatic designation, unloading trailers and downloading, and other sorting functions, Tommy said.

She added that the efficiency programs that included the abandonment of the unpopular Amazon Business works that give administrative confidence, can reach its 12 % goal of the operation of the United States.

UPS earlier this year also launched an efficient campaign aimed at redesigning the internal operations that will be estimated to save one billion dollars by next year.

Some analysts suggested that UPS generate more savings from restructuring them. Ravi Shankar said in the client’s memo that investors were expecting $ 5 billion in savings over the next 18 months, in addition to the cost that was previously announced.

The administration replaces the previous goal for the previous 2028 of $ 4 billion in the annual spending of spending (3 billion dollars from the future network and $ 1 billion from the process of efficiency of the operation) with a three-year program. “It is still possible that there will be $ 3.5 billion in 2025-which makes it very difficult to determine the extent of” savings in geographical time still.

Ups results in the first quarter of analysts’ expectations, which have been reduced in recent weeks due to unrest in global markets caused by the global tariff policies of the United States government.

Revenue fell 0.7 % on an annual basis to 21.5 billion dollars, while a modified operating profit increased by 1 % to $ 1.7 billion.

UPS did not provide updated guidelines for the whole year due to the uninterrupted macroeconomic environment resulting from the global tariff policies of the United States government. But expectations in the second quarter are a negative year.

Revenue is expected to be 21 billion dollars, a decrease from 21.8 billion dollars, with a decrease in the average daily local size of about 9 % on an annual basis. International revenues will decrease by about 2 % due to the low additional fees related to demand and uncertainty in customs tariffs.

Live UPS is exposed to limited definitions. The import volume in the United States is about 400,000 pieces per day, which represents less than 2 % of the total global daily size. China to the United States is the most profitable trade for UPS, and represents 11 % of the total international revenue. Revenue from other countries to the United States is about 17 % of the total international revenue.

During the first quarter, international revenues increased by 2.7 %, driven by an increase of 7.1 % in average daily size. UPS said it had witnessed a request to the service received as customers withdrew stock purchases forward before the expected tariff changes.

UPS expects to weaken American imports from China, which faces 145 % customs tariffs, through growth in the commercial corridors from China to non -American, as well as growth from other parts of the world to the United States, it manages models for all kinds of scenarios so that they can make operational adjustments with the progress of the year.

Tommy said that the 100 best customers in the company explore a set of tactics to deal with customs tariffs, including cost absorption, pass to consumers and asked suppliers to eat some increase. The company also wiped nearly 45,000 customers to redirect charging, most of them said they are using current inventory levels to support sales. Many of the older importers store the goods from 30 to 90 days before the usual to avoid the definitions that kicked earlier this month. Record requests lead to low charging activity. Importers also say they convert more shipments from traveling to the ocean, wherever possible.

Air charging containers are transported on a special floor with rollers in UPS WorldPort in Luisville, Kentucky. (Photo: Eric Colic/shipping waves)

“We see some slowdown in size in both small and medium -sized companies, especially in SMB, because they do not have the tools needed to deal with the changes our customers in the institution. This will put some pressure on revenues for each package and margins.”

Tome added that the smaller companies do not have the working capital to request a pre -stock and have a lower ability to obtain contracts manufacturing companies to switch to non -adult countries of adult retailers.

Online online shoppers on the Chinese platforms will see a significant increase in prices on May 2, when the United States finishes exempting the customs tariffs for low dollars shipments, which leads to 145 % duties in addition to other treatment costs. TEMU and Marchant Shein show consumers import fees during the exit, and according to what Amazon will do the same.

UPS has long encouraged its ability to facilitate small companies to participate in global trade by reaching their closed global network, expertise and technology. Recently introduced a new retailer called Global Checkout. Artificial intelligence is used to evaluate the elements in the shopping cart and calculate health import fees

The average domestic daily size was less than expected due to the decline in some customers in response to the uncertainty created by the Trump administration.

During this quarter, UPS completed the additions to the Surepost Milis Milis connection product from the American Post service and changed the name of the most economical shipping service to Ground Saver. Restore full control of the product, which is used primarily by adult retailers to charge the goods to the housing, and gives up more operational and reliability flexibility with almost no increase in cost after the postal service began to raise transportation prices. Tommy said at the time specified for the Earth’s Earth was 97 % during the first quarter.

The parcel giant also re -submitted ground delivery with shipping pricing for more than 150 lbs, providing parcel -like prices for lower cargo charges. UPS sold UPS shipping to TFI International four years ago.

Local revenues grew by 1.4 %, driven by an increase in air cargo and improving 4.5 % in revenues for each piece, which partially compensates for a decrease in size. The local sector increased the operational profits by $ 164 million on an annual basis.

The average daily Earth size decreased by 2.5 % on an annual basis, the total air size decreased by 9.6 %, partly due to the sliding in the Amazon business. UPS said that the total daily air size has grown by 6.2 % driven by 6.2 % driven by asking health care and high -tech customers.

The revenues in the supply chain solutions decreased by 14.8 %, due primarily to the sale of logistics of truck wolf. Air conditions revenues were slightly lower than years on an annual basis due to low size, which were compensated for more than the high market prices in the ocean.

Last week, UPS announced an agreement to obtain a Canadian logistics company and Endlauer Healthcare Group Inc. For $ 1.6 billion as part of the strategic effort to focus on the upper margin work, with parcel sizes decreased.

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