UPS cuts 48,000 jobs to boost profits – Amazon slowdown, Trump tariff impact?
Atlanta-based logistics giant UPS said Tuesday it has cut 48,000 jobs since last year as part of a sweeping restructuring effort to boost profits and regain investor confidence.
The delivery division, which employed nearly half a million people at the start of 2024, confirmed it is eliminating 34,000 positions across its U.S. driver and warehouse workforce this year. It also began cutting another 14,000 executive positions last year.
The announcement came alongside better-than-expected third-quarter earnings, with UPS shares rising more than 7% in afternoon trading.
“We are undertaking the most significant strategic shift in our company’s history, and the changes we are implementing are designed to deliver long-term value for all stakeholders,” said Carol Tomé, UPS Chief Executive Officer.
Why is UPS cutting so many jobs?
UPS has faced persistent pressure from investors as its shares have lagged the broader market in recent years. The company’s management has embarked on a large-scale efficiency overhaul by tightening operations and scaling back unprofitable businesses, including a delivery partnership with Amazon.
UPS said Amazon deliveries fell 21% year-over-year in the third quarter as it prioritized higher-margin business.
“Revenue per pack in the U.S. increased 10% year-over-year in the third quarter,” Ms. Tomé told analysts.
How is the company’s financial performance?
Despite major layoffs, UPS’s net income fell to $1.3 billion in the third quarter from $1.5 billion a year earlier. Revenue also fell from $22.2 billion to $21.4 billion.
However, adjusted earnings per share exceeded analyst expectations, reaching $1.74.
The restructuring appears to have affected Wall Street—at least temporarily; stocks rose sharply on Tuesday. Still, UPS’s shares are down about 25% this year, compared with a 17% gain in the S&P 500 index.
How have tariffs and changes in global trade affected UPS?
UPS’s international operations have also been hit by new tariffs that President Trump’s administration implemented earlier this year.
The volume of packages shipped from China to the U.S. dropped nearly 30% in the third quarter, according to the company.
Customs data show that shipments under $800, once exempt from tariffs, dropped from 4 million packages a day to about 1 million packages a day after Trump closed the so-called “de minimis” loophole in May.
What about the union’s reaction?
The Teamsters union, which represents many UPS workers, has previously warned that it would oppose any layoffs that violate the company’s employment contract.
On Tuesday, Ms. Tomé insisted that UPS acted lawfully:
“UPS complied with the terms of our contract,” he said.
The layoffs have reignited the debate over workforce retention and automation in the logistics industry, especially at a time when rivals such as FedEx are also facing cost pressures due to slowing global trade.
What’s next for UPS?
As UPS tightens its operations and adapts to the post-pandemic delivery economy, analysts say the company’s turnaround depends on balancing cost cutting with service reliability.
As e-commerce slows and trade barriers rise, UPS’s largest restructuring in its 117-year history marks a pivotal moment for both the company and its workforce.
