UPS to cut 20,000 jobs, Q12025 revenue flat
Consolidated operating profit was $1.7 billion, up 3.3% compared to the first quarter of 2024.
UPS announced plans to reduce 20,000 operational positions during 2025 and close 73 leased and owned buildings by the end of June 2025.
"We are continuing to review our network and may identify additional buildings for closure. As of March 31, 2025, we continue to evaluate the impact of expected changes in volume on our air network. We anticipate $3.5 billion of total cost savings will be delivered from Network Reconfiguration and Efficiency Reimagined in 2025," says an official release while announcing Q12025 results.
Teamsters General President Sean M. O’Brien, on the announcement from UPS anticipating cutting 20,000 jobs this year, had this to say: "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."
Q1 revenue flat
UPS reported first-quarter 2025 consolidated revenues of $21.5 billion, a 0.7 percent decrease from the first quarter of 2024. "Consolidated operating profit was $1.7 billion, up 3.3 percent compared to the first quarter of 2024. Diluted earnings per share were $1.40 for the quarter."
Carol Tomé, Chief Executive Officer, UPS says: " As a trusted leader in global logistics, we will leverage our integrated network and trade expertise to assist our customers as they adapt to a changing trade environment. Further, the actions we are taking to reconfigure our network and reduce cost across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS."
US domestic revenue up marginally
UPS reported a marginal (1.4 percent) increase in US domestic revenue at $14.46 billion, "driven by increases in air cargo and a 4.5 percent improvement in revenue per piece, which partially offset a decline in volume." Operating profit, however, declined to $979 million from $1.01 billion in Q12024.
International revenue up on higher ADV
International revenue increased 2.7 percent to $4.4 billion on 7.1 percent increase in average daily volume (ADV), the release added. Operating profit declined to $654 million from $682 million.
Supply Chain Solutions revenue down 15%
Revenue declined 15 percent to $2.7 billion, primarily due to the divesture of Coyote, the release added.
Amazon glide down on path
The Amazon volume UPS plans to keep is profitable and healthy, Tome said in an analysts call after announcing the results. "In other words, volume where we can add value like returns and seller fulfilled outbound volume. In the first quarter, Amazon’s ADV decline ran slightly ahead of plan but is expected to be on plan by the end of the first half of this year. The Amazon Glide Down plans have been integrated into our Network of the Future initiative. We are executing the largest network reconfiguration in our history."
In the first quarter, Amazon ADV was down 16 percent year over year, "which was more than we originally planned. Second quarter Amazon ADV is also anticipated to be down 16 percent, which is less than we originally planned. And looking at the first and second quarters together, our total expected Amazon decline for the first half of 20-25 percent is on track."
Transformation 2.0
In connection with the Network Reconfiguration and Efficiency Reimagined programmes, "we expect to record between $400 and $600 million in expense during 2025, related to early asset retirements, lease related costs, third-party consulting fees and employee separation benefits."
