UPS, Amazon, and FedEx are all fully engaged in their annual employee purge.
UPS says it is cutting 48,000 jobs in 2025–34,000 in management and 14,000 in operations.
This might explain why Graff-Pinkert’s Wickman spare parts business was getting tariffed 200% on imports from England rather than the 10% rate we’re supposed to be getting. UPS doesn’t have the people to process the tariffs so they hit us first with 200% with a promise “one day” they will refund what we’re owed. Now we only use DHL for imports.
One of the big reasons for UPS’s cuts is Amazon. They have been UPS’s biggest client in recent years, but that business is going away.
UPS is struggling to hold up profits. Its drivers are unionized primarily by the Teamsters, which brings inefficiencies.
In 2010, Noah and I interviewed James Hoffa Jr. while the company’s 22 different union locals were trying to hammer out a deal before a strike. On a personal basis, I found Hoffa very friendly and confident that a strike would be avoided, which it was.
But this is a different business climate today. Amazon was a youngster then. FedEx had a much less package-oriented business 15 years ago. UPS dominated packages. Not so much today, so UPS sees cost cutting as the only way to stay competitive.
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For Amazon, the announced cuts are for 14,000 people, but the total losing jobs seems to be over 30,000. Despite major advances in sales and profits year over year, management is trimming throughout the company, even in the tremendously profitable AWS unit, which is the world’s largest cloud platform.
Amazon is also dedicated to reducing the number of employees working within the enormous network of warehouses that dot the United States and elsewhere.
The company made huge gains during the Covid-19 pandemic. Package handling has been slowly receding as a part of the company’s business, and it is not the most profitable part. The management has been relentless in cost cutting, and they are still in the early phases of implementing robots in sorting and delivery.
As self-driving vehicles become ubiquitous, we will see fewer drivers and more walking robots to deliver to people’s doors.
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FedEx is also in a continuous job reduction mode. Their program is called Network 2.0–corporate lingo for “streamlining” operations and reducing distribution facilities.
An example is the layoffs in Memphis, where the company started and is still based. One of their biggest clients in Memphis has been Cummins, which is moving a significant piece of their parts distribution segment out of Tennessee.
Like Amazon and UPS, they are attempting to support profits by cutting jobs and facilities. It is a relentless task.
When President Donald Trump asked Elon Musk and his cost cutters to reduce the federal bureaucracy, they did what corporate America, such as Amazon, UPS, and FedEx do year after year.
Did Musk approach the task with a meat axe, rather than a scalpel? Of course, because he knew the political winds would blow strongly against him.
Does job cutting in America mean greater unemployment? Traditionally it has not. Will AI and robots change things? Maybe.
Anybody know of a good screw machine operator out of work?
Question: How have these layoffs affected you?
