Sure, here’s a revised version:
—
Roula Khalaf, Editor of the Financial Times, curates her preferred stories for the weekly newsletter, Editor’s Digest.
UPS announced plans to cut 20,000 jobs in the current year and shut down over 70 buildings. This decision is part of the logistics group’s strategy to reduce costs and prepare for a decrease in package volume from Amazon, its largest customer.
The reductions will mainly affect employees responsible for package delivery and those supporting UPS’s transportation and logistics services. This follows the previous year’s cut of about 14,000 jobs, mostly in management positions.
The latest job cuts are part of UPS’s initiative to enhance efficiency and consolidate its US domestic network. The company previously reached a preliminary agreement with its “largest customer” to reduce delivery volumes by the latter half of 2026.
Amazon, which accounted for 12 percent of UPS’s $91 billion revenue in 2024, primarily through the US domestic package segment, now rivals UPS and FedEx in parcel volumes. UPS’s CEO, Carol Tomé, explained that while Amazon is their largest customer, it is not the most profitable due to its dilutive margins on the US domestic business.
In response to the anticipated decline in Amazon-related business, UPS plans to close 73 leased and owned facilities in 2025 and has also indicated a need to downsize its aircraft and vehicle fleets.
Management described these actions as timely amid ongoing challenges such as the US government tariffs on trading partners. UPS refrained from updating its annual outlook due to economic uncertainty.
Tomé noted that UPS averages shipping about 400,000 packages into the US daily, constituting roughly 2 percent of the company’s global daily volume. The US-China trade routes contributed 11 percent to the $18 billion in revenue for UPS’s international segment in 2024, with other international trade lines to the US accounting for about 18 percent.
UPS, headquartered in Atlanta, has a global workforce of approximately 490,000, with nearly 83 percent based in the United States, based on the company’s latest report.
The company’s cost-reduction plan is projected to save $3.5 billion by 2025, with expected expenses of $400 million to $600 million this year related to early asset retirements, lease expenses, and employee separation benefits.
In the first quarter of 2025, UPS reported a net income of $1.2 billion, with revenue falling less than anticipated to $21.5 billion. UPS shares fell by 0.4 percent on Tuesday.
