UPS Slashes 48,000 Jobs in Ongoing Turnaround Effort

United Parcel Service (UPS) has announced a significant shift in its operational strategy, resulting in a reduction of approximately 48,000 jobs. This comes as part of an ongoing turnaround effort aimed at enhancing efficiency and profitability.

Third-Quarter Financial Performance

In its third-quarter earnings report, UPS surpassed Wall Street expectations, earning $1.31 billion for the three months ending September 30. This translates to earnings of $1.55 per share, compared to $1.80 per share or $1.99 billion during the same period last year.

When excluding one-time costs, earnings adjusted to $1.74 per share. This figure significantly exceeded analyst estimates, which predicted earnings of $1.31 per share. Revenue also topped expectations, reaching $21.42 billion against a forecast of $20.84 billion.

Details of Job Cuts

As part of its turnaround plan, UPS has revealed substantial job reductions. These include:

• About 34,000 operational positions have been eliminated.
• Approximately 14,000 management jobs are also being cut.
• Daily operations have ceased at 93 leased and owned buildings within the first nine months of this year.

In the previous April announcement, UPS indicated plans to slash around 20,000 jobs and close over 70 facilities, primarily in response to a decrease in Amazon shipments. The company aims to reevaluate its network to potentially close more locations.

Change in Relationship with Amazon

In January, UPS reached a pivotal agreement with Amazon, its largest client, to reduce shipment volumes by more than 50% by mid-2026. CEO Carol Tomé highlighted the company’s long-standing partnership with Amazon, which had lasted nearly 30 years. The reassessment of this relationship has prompted significant changes at UPS.

Cost Savings and Future Outlook

By the end of September, UPS reported cumulative cost savings of around $2.2 billion. The company is targeting total year-over-year cost savings of $3.5 billion by 2025. These efforts are integral to UPS’s strategy to streamline operations and improve profitability.

The adjustments in workforce and operational structure reflect UPS’s commitment to navigating a competitive landscape while maintaining strong financial performance.