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UPS layoffs: Delivery giant to slash 30,000 jobs in major cost-cutting drive; Who will be impacted?
UPS plans to cut over 30,000 positions as it ends its profitable partnership with Amazon, aiming for strategic transformation by 2026.
UPS layoffs: Over 30,000 positions are set to be eliminated at United Parcel Service, commonly known as UPS, following the company's layoff announcement made on Tuesday, coinciding with the impending end of its profitable delivery partnership with Amazon.
However, the company asserts that these layoffs are essential as it aims for a strategic transformation to protect the brand from potential losses anticipated by 2026.
UPS Chief Financial Officer Brian Dykes addressed analysts after the release of the company's quarterly earnings, according to a report from CNBC. He elaborated on the necessity of these reductions. Brian Dykes indicated that UPS intends to decrease approximately 25 million total operational work hours due to a decline in Amazon shipments. In a bid to achieve cost savings, UPS plans to eliminate up to 30,000 operational positions, which encompass roles directly associated with delivery and sorting.
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UPS layoffs: What employees need to know about job cuts plan
Brian Dykes stated that the majority of job reductions will occur through attrition, which includes employees voluntarily leaving, retiring, or not being replaced.
UPS announced its intention to provide a second voluntary exit program for full-time drivers. This initiative is aimed at drivers who opt to depart from the company voluntarily. UPS has already identified 24 facilities that will be shut down, with closures scheduled for the first half of 2026. Employees at these sites may be impacted.
The organization stated that additional facilities may close later in 2026, contingent upon the company's performance. UPS reminded stakeholders that it closed 93 facilities in the previous year, demonstrating that the company has commenced its network reduction, as per a CNBC report.
Furthermore, UPS indicated that it will increase its reliance on automation, which will be implemented in delivery and sorting centers. The objective is to reduce expenses and enhance operational efficiency.
A look at UPS last year's layoffs
UPS noted that the forthcoming layoffs follow significant job eliminations that occurred last year. The firm reported the reduction of 48,000 positions across its operations last year, with 34,000 of those being operational roles and the remaining 14,000 in management. Initially, UPS anticipated cutting approximately 20,000 jobs. However, the ultimate number of job reductions exceeded expectations.
CEO Carol Tomé is spearheading a turnaround strategy, with the aim of strengthening the business. UPS mentioned that Amazon was previously its largest client, but the two companies are gradually decreasing their business interactions.
UPS projects that it will save around $3 billion by scaling back its operations with Amazon, CNBC reported. On Tuesday, UPS released its fourth-quarter earnings, revealing results that surpassed Wall Street's expectations.
