UPS to lay off 20,000 workers, close over 70 facilities
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UPS has announced plans to cut 20,000 jobs and close more than 70 facilities as it looks to reduce the volume it delivers for Amazon by more than 50% by June.
"The first phase of our network reconfiguration includes 164 operational closures, including 73 building closures by the end of June of this year," the firm's CFO Brian Dykes said.
Dykes also said position changes are not only connected to the buildings it is closing but will also be made across the entire U.S. network.
"Our planned reductions are in line with the total Amazon volume decline," he said.
Dykes said associated with this volume reduction, UPS is undertaking the largest network reconfiguration in our history.
"This effort has been combined with our Network of the Future initiative as both will help drive us to a more efficient network," he said.
UPS said it doesn't plan to share additional details until it is confident that all impacted individuals have been informed.
During UPS' fourth-quarter earnings conference call in January, CEO Carol Tomé said 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 at the time. "Its margin is very dilutive to the U.S. domestic business."
The company employs about 490,000 workers, according to FactSet.
United Parcel Service Inc. also 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.
The Associated Press contributed to this report.