UPS and the post office are both slashing staff

More automation, shuttered facilities and other cost-cutting measures mean fewer workers handling mail and packages

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UPS truck
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Consumers using “snail mail” will have about 30,000 fewer people handling their letters and packages this year. Both UPS (UPS-2.23%) and the U.S. Postal Service (USPS) say this shouldn’t affect delivery times in any significant way.

In its first-quarter earnings release last week, UPS announced it was reducing its global workforce by 4%, or 20,000 jobs, by June. That followed the March announcement by USPS that 10,000 workers would be phased out using a “voluntary early retirement plan.” Both moves are accompanied by efficiency measures to streamline operations. With the aim of reducing $3.5 billion in costs, UPS will be closing 73 buildings, and 400 facilities will have increased automation.

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Earlier this year, outgoing Postmaster General Louis DeJoy had promised to work with Elon Musk’s DOGE to cut costs. In 2021, USPS revealed a 10-year plan to overhaul operations, saying that it faced $200 billion in losses and even potential bankruptcy. DeJoy then oversaw a 20% reduction in the USPS workforce, for savings of $200 million, in what he himself acknowledges was called “the Friday night massacre.”

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UPS announced in January that it was halving the amount of business it does with Amazon (AMZN-2.87%). UPS CEO Carol Tomé said on an earnings call that, “Amazon is our largest customer, but it’s not our most profitable customer. Its margin is very dilutive to the U.S. domestic business.” UPS stock tumbled 15%, and has not yet recovered

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The Teamsters union, which represents more than 300,000 UPS workers, is protesting the job cuts, saying UPS can expect “a hell of a fight” in a statement from president Sean M. O’Brien. An August 2023 agreement with the union, which led to higher wages, also promised 30,000 Teamster jobs would be created at UPS.

The UPS earnings report was cagey about the impact of tariffs — particularly on Chinese-made products that comprise an estimated 70% of products shipped via Amazon. Eleven percent of UPS’s international revenue is tied to Chinese deliveries.

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“Given the current macro-economic uncertainty,” UPS said, “the company is not providing any updates to its previously issued consolidated full-year outlook.”