NCS
—
UPS will minimize 20,000 jobs this yr, about 4% of its world workforce, the corporate mentioned Tuesday. But UPS added the choice is unrelated to tariffs and is as an alternative due to increased use of technology and a beforehand introduced plan to trim its Amazon business.
UPS in January introduced a “glide down” plan to minimize its business with Amazon, its largest buyer, in half by the center of 2026. UPS CEO Carol Tome mentioned Tuesday that many of the Amazon business that it is giving up is “not profitable for us, nor a healthy fit for our network.”
The UPS package deal quantity from Amazon was already down 16% within the just-completed quarter, which was a much bigger drop than UPS had forecast for the interval. UPS mentioned it can shut 73 US buildings by the tip of June as the subsequent a part of that “glide down” plan.
UPS additionally mentioned it expects to use extra automation in its services, from sorting packages to label software to loading and unloading vans, with 400 services turning into partly if not absolutely automated.
“With this reconfiguration, we will also lessen our dependency on labor,” she mentioned.
The Teamsters union, which represents greater than 300,000 UPS hourly employees, mentioned it could battle layoffs of any of its members.
“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” mentioned the union’s president, Sean O’Brien. “But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.”
In response, UPS spokesman Glenn Zaccara mentioned the corporate intends to dwell up to all of the phrases of its contract.
UPS did see some results from Trump’s broad tariffs of 10% on most imports, although, particularly the 145% tariffs on Chinese imports. But the corporate is nonetheless unsure concerning the final results.
Tome mentioned clients that do a variety of business with China are “not thinking about exiting the business.” But she additionally mentioned that lots of them don’t know precisely what their subsequent step might be. Many are nonetheless hoping for a tariff roll-back.
“Candidly, there’s so much uncertainty around the China orders,” she mentioned. “We know what’s been announced. We don’t know actually if it will happen, and we don’t know if it will stick. We think there are many things we don’t know.”
UPS does imagine its clients will really feel an influence from the tariffs, and due to that, and the pull-back from Amazon, it forecast its personal income will fall within the second quarter in contrast to a yr in the past. But it mentioned it is not prepared to drop its personal full-year steerage, though it warned it may regulate that sooner or later as nicely.
“There’s so much uncertainty in the back half (of the year), because all those (tariffs) will ultimately impact the US consumer,” she mentioned. “Current consumer sentiment is down from where it was at the beginning of the year. (But) the consumer is still pretty healthy.”