In announcing its first-quarter financial results, United Parcel Service (UPS) said that it plans to cut 20,000 jobs as the U.S. economy deteriorates and demand for its deliveries weakens.
Atlanta-based UPS said that it needs to cut costs in an increasingly uncertain economy that is being roiled by U.S. President Donald Trump’s import tariffs and global trade wars.
News of the job cuts comes as UPS reported Q1 earnings per share (EPS) of $1.49 U.S., which was ahead of the $1.38 U.S. forecast on Wall Street.
Revenue in the January through March quarter totaled $21.50 billion U.S., beating analyst expectations that called for $21.05 billion U.S.
Management said that the company’s U.S. domestic segment revenue grew 1.4% to $14.46 billion U.S. due to an increase in air cargo shipments and improving revenue per package.
However, shipping volumes declined towards the end of the quarter and UPS said it needs to now cut jobs as it prepares for a U.S. economic slowdown in the months ahead.
In January, UPS forecast full-year revenue of $89 billion U.S. and an operating margin of 10%.
The company, which is the largest shipping and logistics firm in the world, said it is not providing any updates to its full-year outlook due to economic uncertainty.
Executives at UPS stressed that they are seeing their customers reduce costs and shipping orders in anticipation of a demand hit from Trump’s tariffs and a possible recession in the U.S.
In addition to the 20,000 job cuts, UPS said that it plans to close 73 leased and owned buildings by the end of June this year.
The cost cuts are expected to save UPS about $3.5 billion U.S. in 2025.
The stock of UPS has declined 35% over the last 12 months to trade at $97.09 U.S. per share.