(Bloomberg) – United Parcel Service Inc. expects to lay off 20,000 jobs this year, and it significantly reduces shipments from e-commerce giant Amazon.com Inc.
UPS said in a statement Tuesday that the reduction in its operating workforce was a response to “lower expectations for our largest customers,” as part of a network overhaul. Atlanta-based couriers will close leased and owned buildings by the end of June and say other facilities may be determined.
UPS aims to reduce costs and increase profitability after an announcement in January of a plan to cut the number of low-profit Amazon packages it delivers for more than half of its 18-month period. Packaging handlers are expected to save $3.5 billion in total cost through network reconfiguration this year.
UPS seeks to improve efficiency in the face of the e-commerce pandemic boom. The industry is also dealing with new challenges from President Donald Trump’s tariffs that complicate the transport of cross-border goods and inject volatility into the global economy. UPS pulled out of its 2025 financial guidance Tuesday, saying it would not provide “in view of current macroeconomic uncertainty.”
Still, the company reported adjusted earnings per share for the first three months of the year at $1.49, an average of $1.40 compiled by Bloomberg. The income during this period also almost exceeded expectations.
UPS shares rose 4.6% before regular trading in New York. This year ended Monday, its stock fell 23%.
UPS and FedEx Corp. are seen as barometers of the broader economy as their delivery network covers the industrial and retail sectors, thus providing insights into orders from manufacturers and consumers. Investors in various industries have been looking for clues about the impact of Trump’s trade policy, which has the potential to plunge the economy into a recession.
UPS has been redesigning its operations to move from low-profit plots to a more profitable line of business. The company is working to position itself as a professional logistics provider that can move higher-yield packages, such as temperature control or emergency health care shipping.
Last week, it agreed to acquire Andlauer Healthcare Group Inc., a Canadian-based health care logistics company, for $1.6 billion. The move is the latest in a series of deals as the company tries to reach $20 billion in healthcare revenue by 2026.
While UPS has not updated its 2025 outlook, it said it will detail the expectations for the second quarter of Tuesday. It previously forecasts revenues of about $89 billion for the full year and operating margin of about 10.8%.
The general uncertainty across the U.S. companies were highlighted as the Trump administration announced (in some cases where adjustments were suspended or adjusted) huge tariffs on imports from other countries, so the decision not to update the annual forecast. Companies from American Airlines Group Inc. to footwear maker Skechers Inc. have boosted their outlook, while UPS rival FedEx cuts out in March.
(To update the first paragraph, add details.)
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