(Bloomberg) — United Parcel Service Inc. expects to cut 20,000 jobs this year and close facilities as it dramatically reduces shipments for e-commerce giant Amazon.com Inc.
The reductions in its operational workforce are part of a network overhaul in response to expected “lower volumes from our largest customer,” UPS said Tuesday in a statement that also detailed first-quarter results. The Atlanta-based courier will shutter 73 leased and owned buildings by the end of June and said it may identify additional facilities for closure.
UPS aims to cut costs and improve profitability after announcing a plan in January to slash the number of low-margin Amazon parcels it delivers by more than half over 18 months. The package handler expects $3.5 billion of total cost savings this year from the network reconfiguration.
UPS has sought greater efficiency in the face of a drawdown in volumes following a pandemic-driven boom in e-commerce. The industry is also grappling with new challenges from President Donald Trump’s tariffs, which have complicated cross-border goods shipments and injected volatility into the global economy. UPS on Tuesday backed away from its 2025 financial guidance, saying it wouldn’t provide an update “given the current macroeconomic uncertainty.”
Still, the company reported adjusted earnings of $1.49 a share for the first three months of the year, topping the $1.40 average of analyst estimates compiled by Bloomberg. Revenue in the period also narrowly beat expectations.
UPS shares climbed 4.6% before regular trading in New York. Its stock tumbled 23% this year through Monday’s close.
UPS and FedEx Corp. are viewed as barometers for the wider economy because their delivery networks span the industrial and retail sectors, providing insights into orders placed by manufacturers and consumers alike. Investors across industries have been looking for clues to the impacts of Trump’s trade policies, which threaten to tip in the economy into a recession.
UPS has been reworking its operations to shift away from low-margin parcels in favor of more profitable business lines. The company is working to position itself as a specialized logistics provider that can move higher-yield parcels such as temperature-controlled or urgent health-care shipments.
It agreed last week to acquire Canada-based health-care logistics company Andlauer Healthcare Group Inc. for $1.6 billion. The move is the latest in a string of deals as the company seeks to reach $20 billion in health-care revenue by 2026.
While UPS didn’t update its 2025 outlook, it said it would detail expectations for the second quarter on Tuesday. It previously predicted full-year revenue of about $89 billion and a full-year operating margin around 10.8%.
The decision not to update the annual forecast underscores the widespread uncertainty across corporate America after the Trump administration announced — and in some cases paused or adjusted — large tariffs on imports from other countries. Companies from American Airlines Group Inc. to footwear maker Skechers USA Inc. have pulled their outlooks, while UPS rival FedEx cut its outlook in March.
(Updates to recast first paragraph, add details throughout.)
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