- Global Course Ups It reduces 20,000 jobs and automated hundreds of facilities as it tries to enhance profitability in the midst of a huge reform of its delivery network. Earlier this year, the company announced an ambitious plan to avoid it Amazon In favor of the most profitable packages – only before Trump’s tariff ads sent global trade sizes.
United Part Service The waves were made earlier this year when it announced the disintegration of the world’s largest e -commercial trader. Amazon, a competitor as well as a customer who brings more than ten UPS revenues, turns into an unburled charger, and In January This year, UPS has announced plans to reduce the size it provided to Amazon by about a year and a half.
“They are our largest customer, but they are not our most profitable customers,” Carroll Tommy, UPS CEO, said in an interview with her. Bloomberg TVHe described the step as “controlling our destiny.”
Three months later, this destiny became more clear as UPS announces plans to reduce 20,000 jobs, close 73 facilities, re -recharge its charging network to use the less human workers – the charger that the charger said is changing that the charger “in a line” with the size of the Amazon that he was losing, but also preparing it to proceed more.
“We are implementing the largest network reinstating in our history,” Tommy said at the company. Profits Call on Tuesday after announcing the changes.
She said the Amazon Delivery delivery is “not profitable for us, nor a healthy seizure of our network.” She said that more, UPS plans to increase automation, which will reduce our dependence on employment (and) reduce the capital requirements needed to operate the network. “
Brian Dix financial director said about half of the buildings to be closed in the eastern United States. 50,000 jobs will be reduced “the entire US network will be performed.”
The update of UPS, which has been previously announced, includes unifying and closing 200 sorting facilities over five years. Under the plan, nicknamed “Network of the Future”, the charger automated the package sorting; Tommy told investors that he is also looking to use robots for tasks such as loading and unloading trailers and applying stickers.
Ultimately, about 400 UPS facilities will be partial or completely complete. “The end result will be a more efficient process with less dependence on labor,” he said.
This is not welcome news to the Teamsters Union, which represents about 350,000 UPS workers, which also negotiated Historical contract For its work two years ago.
” statement. “But if the company intends to violate our contract or make any attempt to continue the jobs of a good -wage Teamsters team, it will be UPS in a battle.”
shipping Uncertainty
However, the UPS chapter of Amazon may be the easy part of its reshaping. Weeks after the announcement of this change, President Donald Trump announced a commercial tariff for American trading partners, and has effectively raised consumer prices on thousands of commodities and the nation’s launch in a series of re -negotiations with dozens of countries. Currently, importers pay a 10 % basic tariff on all imports and 145 % on most imports from China, while different rates of “mutual tariffs” are about 60 Countries She was appointed to kick this summer.
This turmoil meant a fewer shipment for UPS in February and March, and the charger led the profits to the rest of the year.
“The world has not faced enormous trading effects for more than 100 years ago,” Tommy said. “The only thing we are sure of is that we do not know, if any, from our scenarios.”
Executive officials said only about 2 % of UPS comes from international packages. However, the UPS trade lines from China to the United States are the most profitable for the company, Tommy told investors. But as this road rises, the company believes that the demand is growing in shipments from China to the rest of the world, as well as from Europe, Thailand and Vietnam.
The company expects a 9 % decrease in American charging in the second quarter and a modest decrease in revenue.
“There is a lot of uncertainty about China, and it has been announced now,” Tommy said. “We don’t actually know what will happen. We don’t know if that is appropriate. There are many things that we don’t know.”
This story was originally shown on Fortune.com
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