Amazon, UPS Cut Thousands Of Office Jobs To Improve Efficiencies

Despite its pullback from Amazon, UPS is once again linked with the e-commerce giant as each company announced major layoffs on Tuesday.

Amazon executives said it will cut 14,000 corporate positions to operate more nimbly as artificial intelligence helps the company innovate at a quicker rate.

UPS officials said on the company’s third-quarter earnings call that it eliminated 34,000 positions and exited 93 leased and owned buildings during the first nine months of the year as part of a network reconfiguration. Around 14,000 of the job cuts were for managerial positions.

Those UPS numbers exceeded the company’s previously announced plans for the year. In April, UPS said it would slash 20,000 jobs and shutter 73 leased and owned buildings this year. 

Those figures came four months after UPS announced plans to cut its low-margin parcel business with Amazon by roughly 50%. At the time, the company said it expected the network reconfiguration to generate $3.5B in cost savings.

During the earnings call, UPS officials said the company was on track to hit that goal, having realized around $2.2B in cost savings through Sept. 30. 

Amazon’s layoffs could also exceed the figure it announced Tuesday, as Reuters reported the same day that the company plans to cut as many as 30,000 corporate positions.

That large of a job cut would amount to almost 10% of Amazon’s roughly 350,000 corporate employees. 

The cuts come after Amazon began requiring its employees to come into the office five days a week at the start of the year.

The layoffs from the two companies could be a blow to the U.S. office market that Colliers said moved closer to recovery during the third quarter, with more regions experiencing occupancy gains. 

The latest generation of AI has allowed innovations to accelerate in existing and new market segments, according to a blog post from Beth Galetti, Amazon senior vice president of people experience and technology.

“We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business,” Galetti wrote. 

Amazon CEO Andy Jassy said in June that AI would shrink the company’s workforce, as the technology would necessitate removing layers and flattening organizations. 

Long-term investments in building out its AI infrastructure have created short-term pressures for Amazon to offset those costs, eMarketer analyst Sky Canaves told Reuters. 

Tech giants like Amazon, Meta, Microsoft and Google are spending as much as 50% of their income on capital expenditures for AI infrastructure. Microsoft and Meta have also made AI-driven layoffs this year, Business Insider reported. 

Around 98,000 tech jobs have been cut by 216 companies so far this year, Reuters reported. More than 150,000 positions were eliminated during 2024, according to Layoffs.fyi, a website that tracks tech job cuts.