UPS announced plans on Tuesday to eliminate approximately 20,000 positions and shutter over 70 facilities as the company moves to substantially decrease its handling of Amazon shipments.
The package delivery giant expects to implement the workforce reductions within 2025 and close 73 leased and owned buildings by June's end. Additional facility closures may be identified as UPS continues reviewing its network operations.
The restructuring comes after UPS reached an agreement with Amazon in January to reduce shipping volumes from its largest customer by more than 50% through mid-2026. Despite Amazon's size, CEO Carol Tomé noted the relationship wasn't delivering optimal profitability.
"Amazon is our largest customer but it's not our most profitable customer," Tomé explained during a January earnings call. "Its margin is very dilutive to the U.S. domestic business."
The company, which currently employs around 490,000 workers, aims to emerge stronger through this transformation. "The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier," stated Tomé.
In its latest financial results, UPS reported first-quarter earnings of $1.19 billion ($1.40 per share) and revenue of $21.55 billion, surpassing analyst expectations. However, citing economic uncertainty, the Atlanta-based company maintained its previous 2025 revenue projection of approximately $89 billion without providing updated guidance.
The announcement saw UPS shares edge higher in morning trading as investors responded to both the restructuring plans and quarterly performance.