UPS Cuts 20,000 Jobs, Closes 73 Facilities

UPS is offering voluntary buyouts to its full-time US drivers following its decision to slash 20,000 jobs and close 73 facilities.

The Atlanta-based company will be providing its laid off employees with various benefits, including pensions and healthcare.

The layoffs are part of UPS's network configuration plan, which also confirms the upcoming closures of over 90 more facilities in the future.

The changes are part of the company's $3.5 billion cost reduction target for 2025, aiming to reach a 12 percent US operational margin by next year.

UPS, which is one of the largest parcel delivery companies in the US, currently has 490,000 employees, around 330,000 of which are represented by the Teamsters union.

The union was the first to announce the buyout, calling it an 'illegal violation' of the national contract in which UPS committed to create 22,500 jobs.

'Our members cannot be bought off and we will not allow them to be sold out. UPS needs to live up to the existing contract. They must honor their commitments,' said Sean O'Brien, general president of the union.

The announcement comes months after UPS decided to halve the number of Amazon deliveries it takes before tariffs imposed by President Donald Trump took effect.

Deliveries for the e-commerce giant make up around 12 percent of UPS's revenue.

The company concluded that its profit margins from Amazon deliveries profit were too small, and it wanted to focus on other markets like healthcare and international deliveries.

'The world has not been faced with such enormous potential impacts to trade in more than 100 years,' said CEO Carol Tomé.

Prior to these massive layoffs, UPS axed 12,000 employees and closed 11 facilities last year after its income declined by $1.87 billion due to its 'disappointing year' in 2023.

Those layoffs came less than six months after UPS and Teamsters reached a $30 billion deal with its 340,000 person-union, avoiding a potential strike.

'The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,' Tomé said.

'The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.'

The 20,000 UPS employees are not alone in this year's string of mass layoffs.

Amazon CEO Andy Jassy said he plans to reduce the company's corporate workforce over the next few years as AI will make certain roles redundant.

It comes after the company laid off around 18,000 employees in 2023, informing them via email.

Intel joined the job bloodbath last month by laying off 20,000 employees, particularly those who worked in factories.

Microsoft also confirmed it would cut around 4 percent of its global workforce as it ramps up investments in artificial intelligence.

The tech giant will slash around 9,000 jobs across different teams, geographies and levels of experience, it said on Wednesday.

Besides iconic tech empires, Walmart is scaring its employees by slashing about 1,500 US jobs months after it laid off hundreds of workers in North Carolina.