When a contract between UPS and Amazon came up earlier this year. UPS officials decided it was time to reassess the partnership and the parties reached an agreement that UPS would reduce the number of Amazon shipments it was handling by about half.
Now, UPS is poised to cut some 20,000 jobs and close more than 70 facilities as a result.
The package delivery company said Tuesday that it anticipates making the job cuts this year, according to a report from The Associated Press. UPS anticipates closing 73 leased and owned buildings by the end of June, although a further review would result in more buildings being closed.
“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” CEO Carol Tomé said in a statement on Tuesday. “The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”
In January, UPS announced that it had reached a deal with Amazon, its biggest customer, to lower its volume by more than 50% by the second half of 2026, the AP reported.
During UPS’ fourth-quarter earnings conference call in January, Tomé said that the company had partnered with Amazon for almost 30 years and that when its contract came up this year, UPS decided to reassess the relationship.
“Amazon is our largest customer but it’s not our most profitable customer,” Tomé said during the company’s fourth-quarter earnings call. “Its margin is very dilutive to the U.S. domestic business.”
The company employs about 490,000 workers, according to FactSet.
UPS reported its first-quarter financial results on Tuesday. The Atlanta-based company earned $1.19 billion, or $1.40 per share, in the quarter ended March 31.
Stripping out certain items, earnings were $1.49 per share. That’s better than the $1.44 per share that analysts polled by Zacks Investment Research were calling for.
Revenue totaled $21.55 billion, beating Wall Street’s estimate of $21.06 billion.
