Shipping giant UPS announced on Tuesday that it will be cutting 20,000 jobs to cut costs.
The announcement was made during UPS’s earnings call, Reuters reported.
One reason given was fewer deliveries from Amazon. UPS announced in January that it planned to cut the number of Amazon packages by more than half over the next year and a half.
“Amazon is our largest customer, but it’s not our most profitable customer,” CEO Carol Tomé said in January, according to The Associated Press. “Its margin is very dilutive to the U.S. domestic business.”
The layoffs will affect about 4% of the 490,000-member workforce, CBS News reported.
The cuts will come from the operational workforce, which, according to Bloomberg, includes delivery drivers and package handlers.
The company will also close 73 leased and owned buildings by the end of June, with more locations possibly closing.
The layoffs and the closures will save an estimated $3.5 billion this year for UPS.
“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” CEO Carol Tomé said, according to the AP. “The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”
Amazon said it will continue to partner with UPS and other carriers. Amazon and UPS had been partners for nearly 30 years as of January, the AP reported.
Last year, UPS cut 12,000 management jobs, Bloomberg reported.
In January, UPS said they'd be reducing the number of Amazon deliveries they perform by 50% through 2026. Amazon is currently the shipping company's largest customer.
UPS CEO Carol B. Tomé said at the time that the company planned to make more changes so they'd be more profitable, going forward.
“We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS that is growing in the best parts of the market,” Tomé said in a statement.
With Tuesday's earnings call, it appears the plan to change now includes mass layoffs.
A check of the Georgia WARN Notice portal, a federally required tracker for layoffs, does not yet show any UPS facilities in the state.
Channel 2 Action News requested a more detailed list of where positions and facilities would close was requested from UPS.
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