UPS plans to shed about 20,000 jobs this year as it manages its unprofitable business from Amazon and restructures of its delivery network, reports New York's FreightWaves.
ups reached an agreement to reduce Amazon volumes in its network by more than 50 per cent by June 2026. Outbound deliveries from Amazon fulfilment centres are not profitable compared to returns and outbound volumes from retailers that sell on the Amazon marketplace. About 60 per cent of UPS's Amazon business is lossmaking.
Meanwhile, UPS one year ago announced an aggressive strategy for network consolidation and automation aimed at improving profitability by better matching capacity and labour with lower parcel volumes.
Management told analysts that the Amazon transition plan has been factored into the company's network reconfiguration.
The optimization plan, called Network of the Future, envisions closing 200 sortation centres over five years. UPS intends to close 164 operational shifts in the first phase of the programme, including 73 buildings by the end of June. The company, for example, recently disclosed plans to temporarily close a facility in Portland, Oregon, this summer to enable renovations.
Cost reductions are tied to the separation from Amazon, UPS' largest customer. An additional 30 per cent of the savings is attributed to lower fixed costs such as fewer buildings and support functions.
Said Teamsters President Sean O'Brien: 'United Parcel Service is contractually obligated to create 30,000 Teamsters jobs under our current national master agreement. If UPS wants to continue to downsize corporate management, the Teamsters won't stand in its way.
'But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight,' said Mr O'Brien.
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ups reached an agreement to reduce Amazon volumes in its network by more than 50 per cent by June 2026. Outbound deliveries from Amazon fulfilment centres are not profitable compared to returns and outbound volumes from retailers that sell on the Amazon marketplace. About 60 per cent of UPS's Amazon business is lossmaking.
Meanwhile, UPS one year ago announced an aggressive strategy for network consolidation and automation aimed at improving profitability by better matching capacity and labour with lower parcel volumes.
Management told analysts that the Amazon transition plan has been factored into the company's network reconfiguration.
The optimization plan, called Network of the Future, envisions closing 200 sortation centres over five years. UPS intends to close 164 operational shifts in the first phase of the programme, including 73 buildings by the end of June. The company, for example, recently disclosed plans to temporarily close a facility in Portland, Oregon, this summer to enable renovations.
Cost reductions are tied to the separation from Amazon, UPS' largest customer. An additional 30 per cent of the savings is attributed to lower fixed costs such as fewer buildings and support functions.
Said Teamsters President Sean O'Brien: 'United Parcel Service is contractually obligated to create 30,000 Teamsters jobs under our current national master agreement. If UPS wants to continue to downsize corporate management, the Teamsters won't stand in its way.
'But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight,' said Mr O'Brien.
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