UPS announced on Tuesday that they were planning to reduce employment by 20.5 this year, part of an expense cut, which is associated with the delivery giant’s decision to provide less package from its largest customer Amazon.
The shipping company operated in more than 200 countries currently has about 490,000 employees. The trims will affect a little more than 4% of its employees. It has followed an announcement from UPS last year that it will cut 12,000 positions.
This step is part of the company’s plan to integrate UPS facilities and strengths. In addition to the job cut, the company has announced that it will also shut down 735 buildings in late June 2021 and say it can target additional buildings to close.
“These steps will enable us to expand US domestic operating margins and increase profitability,” said Brian Dyeks, chief financial officer of UPS, while calling for income on Tuesday morning.
In the regulatory filing on Tuesday, UPS said that these cuts were “We have a connection with our largest customer.” This company, which has announced $ 21.5 billion revenue for the last quarter, is expected to save $ 3.5 billion this year as a result of consolidation plan.
“Strong” relationship with Amazon
In January, the company said it had reached an agreement with Amazon to reduce its supply to more than 50% in the second half of 2026.
A UPS spokesman told CBS Moneywatch in an email, “The amount of package from Amazon has chosen to do something that we focus on the quality of the revenue and increase domestic operating margin and profitability.”
The Amazon CBS Moneywatch told an email that the company had a “viewing work relationship” with the UPS and the delivery company proposed to increase the UPS fragments before deciding to reduce its Amazon shipments.
“Because of their operational requirements, UPS requested to reduce the volume and we certainly respect their decision,” Amazon spokesman Kelly Nantel said. “We will continue to partner with them and many more career to serve our customers.
UPS provides several million packages worldwide every year. Last year, the company provided an average of 22.4 million parcels or 5.7 billion for the entire year.
UPS shares go back $ 1.13 cents or 1.16%in initial trading.
In a quarterly income statement, the company also mentioned the risk that the company could be transferred to trade policy worldwide. The Trump administration has introduced new tariffs in recent months that has already begun to influence product flow in the country and around the world.
UPS is keeping customers away from the development of duty on its website. It has also introduced a tool called UPS Global Checkout that shows online buyers that they need to pay for their responsibilities, fees and taxes.
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