UPS cuts back on Amazon deliveries, announces building closures
By Eliza Schultz and Bill Aiman
Chicago, IL – On Thursday January 30, UPS announced a major cutback in Amazon package deliveries, with the goal of dropping over 50% of the volume from the company’s largest customer by June 2026. In conjunction, UPS is looking to permanently shutter 10% of buildings, shrink their fleet of vehicles and lay off workers.
The plan to close more buildings comes on the heels of the hard fought 2023 Teamsters contract, which resulted in major wage gains for part-timers and the end of the 2-tier system among package car drivers. The credible threat of a strike forced UPS to concede to the union’s demands in contract negotiations and look elsewhere for cost savings. Last year UPS laid off 12,000 corporate employees and announced major investments in the automation of hub operations as part of their “Network of the Future” initiative.
“When UPS closes hubs for renovations, they are laying the groundwork for mass layoffs due to automation,” said Alex Carson, a part-time unloader out of Atlanta. “Workers whose hubs get closed for over a year are given the option to drive to nearby hubs, which is untenable for most, as it can add hours to commutes. This allows UPS to effectively conceal how many people actually lose their job due to automation.”
Despite leading the industry with $8.5 billion in profit last year, UPS is being driven by its Wall Street owners to push profits even higher. Under CEO Carol Tome’s “Better not Bigger” strategy, UPS has instituted numerous rate hikes and shifted focus from e-commerce to higher revenue segments like small business and medical. UPS hopes that reducing operations will free up $1 billion in capital which can be reinvested in higher margin sectors requiring less labor. UPS has been making big purchases in healthcare warehousing and logistics, for example the recent acquisition of Europe-based Frigo-Trans and BPL.
“This is why it’s so important that our union continue to put a lot of resources towards organizing Amazon workers,” said Jenny Bekenstein, UPS Teamster and Amazon organizer out of Los Angeles. “Because of how the companies are in competition with each other in the industry and how UPS has the power to downsize or automate if it wants to, our jobs and all of the good things that we fought for in our UPS contract are not safe until we organize Amazon workers to have the same thing and set a real industry standard in logistics that these companies can’t get around.”
Automation and a smaller workforce at UPS make organizing Amazon an existential question for the Teamsters. The growth of Amazon as a non-union, independent delivery service puts competitive pressure on UPS to continue with automation and layoffs. UPS is the largest Teamster employer and job cuts will weaken the union.
The growth of a militant rank-and-file movement makes the Teamsters well poised to fight back against any job eliminations at UPS. Additionally, some drivers and warehouse workers at Amazon have joined the Teamsters in demanding higher wages and better working conditions. By the end of 2024, Amazon had become the largest private delivery business in the U.S., moving nearly 6 billion packages. This past holiday season also saw the first national Amazon strike with Teamsters walking out in California, Georgia, Illinois and New York.