UPS drivers wait as their trucks are loaded at a Manhattan UPS facility in New York.
United Parcel Service‘s first-quarter profit beat market estimates and the parcel delivery giant said it will cut 20,000 jobs to lower costs in an uncertain economy and in anticipation of weak volumes from its largest customer, Amazon.
Shares of the company rose nearly 2% before the bell on Tuesday after it said it expects to save $3.5 billion in 2025 from job cuts and by shutting 73 leased and owned buildings by the end of June.
Extensive tariffs by U.S. President Donald Trump have slowed down trade and led companies to reduce costs in anticipation of a demand hit. For parcel delivery firms, the slowdown is likely to reduce the need for shipping services between companies.
“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” CEO Carol Tome said.
UPS said it was not providing any updates to its full-year outlook due to the economic uncertainty, even as it lowers costs through job cuts, warehouse closures, increased automation and asset sales.
“The removal of 2025 guidance will likely create a wide range of outcomes that may be difficult to underwrite without greater macro clarity,” Evercore ISI analyst Jonathan Chappell said.
The company last year said it cut its workforce by 12,000 jobs. It expects expenses between $400 million to $600 million during 2025, related to separation benefits and lease-related costs.
The Atlanta-based parcel delivery firm in January warned that it was accelerating its plan to slash millions of deliveries for its largest customer, Amazon.com, which accounted for 11.8% of its overall revenue in 2024.
UPS also faces a sharp downturn in volume from China-linked bargain e-commerce sellers Temu PDD.O and Shein after the U.S. decided that starting May 2, it will collect tariffs on goods that were duty-free up to $800 per individual sale.
UPS’ first-quarter revenue fell marginally to $21.5 billion but beat Wall Street expectations of $21.05 billion, according to data compiled by LSEG.
Its U.S. domestic segment revenue grew 1.4% to $14.46 billion in the first quarter, driven by an increase in air cargo and improving revenue per piece, even as volumes declined.
UPS posted an adjusted profit per share of $1.49 compared with expectations of $1.38.
The world’s largest package delivery firm had in January forecast full-year revenue of $89 billion and an operating margin of about 10.8%.
