Written By Lexx Thornton
United Parcel Service (UPS) has implemented one of the largest single-year job reductions by a U.S. company since the pandemic, cutting approximately 48,000 jobs this year as the package giant executes a sweeping strategy to contain costs and boost its lagging stock price.
The Atlanta-based delivery behemoth disclosed the massive downsizing on Tuesday while reporting third-quarter earnings that managed to beat Wall Street expectations. UPS shares subsequently jumped nearly 9% in afternoon trading.
The total job cuts far exceeded previously disclosed targets and account for nearly 10% of the half a million people the company employed at the start of the year. The cuts were split across key areas:
- 34,000 job reductions hit drivers and warehouse operations.
- 14,000 jobs were eliminated in management ranks.
CEO Carol Tomé, the first outsider to lead UPS, stated the company is “executing the most significant strategic shift in our company’s history.” This overhaul follows years of pressure from investors due to underperformance compared to rivals like FedEx and Amazon’s growing logistics arm. UPS stock had previously slumped more than 25% since early 2023.
“We keep finding opportunities for us to bring costs down,” Tomé said on a call with analysts.
The restructuring has already generated $2.2 billion in savings this year. The savings were achieved through multiple initiatives, including automation, facility closures, and reduced seasonal hiring.
Chief Financial Officer Brian Dykes confirmed the holiday shipping season will operate with “less variable capacity, fewer leased aircraft, fewer rented vehicles, fewer seasonal workers.”
UPS confirmed it has closed 93 buildings this year and plans to shutter more before the end of 2025.
The strategic shift also includes a deliberate reduction in reliance on Amazon, UPS’s onetime largest customer. Package volumes from Amazon were down more than 21% in the third quarter as UPS scaled back what it considered lower-margin business. The aggressive cost-cutting has stirred tension with the International Brotherhood of Teamsters, which represents roughly 340,000 UPS workers. The union had previously warned it would challenge any layoffs violating its collective-bargaining agreement. Tomé, however, affirmed Tuesday that the company remained “in compliance with the terms of our contract.” The Teamsters did not immediately comment on the cuts.
While the mass cuts pleased investors, third-quarter financials showed continued weakness:
- Revenue: $21.4 billion (a 3.7% decline from the previous year).
- Profit: $1.3 billion (down from $1.5 billion a year earlier).
The company attributed some difficulties to geopolitical headwinds, noting that new tariffs contributed to a nearly 30% drop in package volume from China to the U.S. during the third quarter.
The deep reductions—the most severe in UPS’s 117-year history—follow a broader trend of corporate downsizings across the logistics and technology sectors. UPS expects full-year revenue to be roughly flat from 2024 but plans to continue trimming its physical footprint and operations through next year.
