United Parcel Service (UPS) announced Tuesday it will eliminate around 20,000 jobs and close 73 facilities as part of a sweeping cost-cutting plan tied to its decreasing reliance on Amazon.

The move comes as the package delivery giant prepares to significantly scale back its business with Amazon, its biggest — but less profitable — customer. The cuts are expected to take place throughout 2025, with facility closures targeted for completion by the end of June. UPS is still reviewing its network, meaning more closures could follow.

“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” said CEO Carol Tomé. “The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”

In January, UPS revealed it had reached a deal with Amazon to reduce package volume by more than 50% by the second half of 2026. Tomé emphasized that while Amazon has been a key partner for nearly 30 years, its deliveries weren’t boosting the bottom line.

“Amazon is our largest customer, but it’s not our most profitable one,” she explained. “Its margin is very dilutive to the U.S. domestic business.”

UPS evaluated several strategic options before settling on cutting volume — a move the company believes will ultimately lead to better operational efficiency and profitability.

The announcement came alongside UPS’s first-quarter earnings report. The Atlanta-based company posted a net income of $1.19 billion ($1.40 per share) for the quarter ending March 31. Excluding certain items, earnings hit $1.49 per share, topping analysts’ expectations of $1.44.

Revenue also beat Wall Street forecasts, coming in at $21.55 billion, compared to an estimated $21.06 billion.

Despite the financial beat, UPS is holding off on updating its full-year forecast due to ongoing economic uncertainty. Previously, the company projected $89 billion in revenue for 2025.

UPS, which employs around 490,000 people, saw its stock rise slightly in early trading following the news.

Source: AP News – UPS to cut 20,000 jobs, close some facilities as it reduces amount of Amazon shipments it handles

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Starbucks is set to lay off 1,100 corporate employees worldwide as part of a broader effort to streamline operations, according to a letter from Chairman and CEO Brian Niccol. The company will notify affected employees by midday Tuesday and will also eliminate several hundred unfilled positions.

Why Starbucks Is Making Cuts

Niccol, who took over as CEO last fall, emphasized that the goal of the layoffs is to increase efficiency, enhance accountability, reduce complexity, and improve integration across the company.

Despite the job cuts, Starbucks’ frontline baristas—who make up the majority of the company’s 361,000 employees worldwide—will not be affected. Some corporate employees, such as those in roasting and warehouse roles, are also exempt from the layoffs.

Niccol had previously signaled in January that corporate layoffs would be announced by early March, stressing the need to simplify decision-making and improve company operations.

Starbucks Joins Other Companies in Downsizing

Starbucks’ move reflects a broader trend of corporate layoffs across major industries:

• Southwest Airlines recently announced 1,750 job cuts, affecting 15% of its corporate workforce in the company’s first major layoffs in 53 years.
• Bridgestone Americas closed a plant in LaVergne, Tennessee, last month, laying off 700 workers.

As companies face economic pressures, workforce reductions have become a common strategy to cut costs and improve efficiency.

Starbucks’ Strategy for a Comeback

Niccol was brought in to revive slowing sales and improve customer experience. His key initiatives include:
Faster Service: Streamlining operations to speed up service, especially during peak morning hours.
Menu Simplification: Cutting back on menu items to make ordering more efficient.
Order Management: Refining Starbucks’ ordering algorithms to balance mobile, drive-thru, and in-store orders.

These changes are meant to enhance Starbucks’ reputation as a community gathering place while addressing customer concerns about wait times and pricing.

Starbucks Sales Struggles and Recent Improvements

In its 2024 fiscal year (ended Sept. 29), Starbucks’ global same-store sales fell 2%:
U.S. Market: Customers grew frustrated with rising prices and longer wait times.
China Market: Starbucks faced increased competition from lower-priced rivals.

However, in the most recent quarter, the company exceeded sales expectations, partly due to visible changes under Niccol’s leadership. One of the most notable shifts was removing the extra charge for non-dairy milk, a move that resonated with customers.

Starbucks Stock Reaction

Following the announcement, Starbucks shares rose by nearly 2% on Monday, indicating investor confidence in the company’s restructuring efforts.

As Starbucks pushes forward with its revamp strategy, all eyes will be on whether these changes can successfully reignite growth and customer loyalty.

Source

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Honeywell, one of the last remaining U.S. industrial conglomerates, has announced a major restructuring. The company will split into three independent entities, joining the ranks of General Electric and Alcoa, which previously broke apart to streamline their operations.

A Strategic Move Toward Agility

The split will see Honeywell separate its automation and aerospace technologies businesses. This follows the company’s earlier decision to spin off its advanced materials division, effectively dividing Honeywell into three distinct businesses.

CEO’s Vision for Growth

Honeywell Chairman and CEO Vimal Kapur emphasized that this restructuring will allow each business to operate more efficiently.

“The formation of three independent, industry-leading companies builds on the powerful foundation we have created, positioning each to pursue tailored growth strategies and unlock significant value for shareholders and customers,” Kapur stated.

Investor Influence and Market Pressure

The decision to break up Honeywell comes amid growing pressure from investors. In December 2023, the company first revealed it was considering spinning off its aerospace division. The public announcement came just a month after Elliott Investment Management, which holds a $5 billion stake in Honeywell, pushed for the separation of its automation and aerospace units.

Timeline for the Split

• Advanced materials spinoff: Expected to be completed by the end of 2024 or early 2025.
• Automation & aerospace separation: Scheduled for the second half of 2026.

A Shift Away from the Conglomerate Model

For decades, U.S. conglomerates dominated industries under the belief that bigger meant stronger. Iconic leaders like Jack Welch of General Electric built massive corporations, assuming that scale would bring market power. However, as leaner, specialized competitors emerged, these sprawling conglomerates struggled to adapt.

The Fall of Traditional Industrial Giants

• Alcoa (2015): Split into two companies, separating its raw aluminum operations from its engineering and transportation sectors.
• General Electric (2021): Announced a three-way split into aviation, healthcare, and energy-focused businesses. This move was seen as a sign that the era of conglomerates was ending, driven by the shift toward a digital economy.

Market Reaction

Despite the long-term benefits expected from the split, Honeywell’s shares dropped nearly 3% in pre-market trading following the announcement.

The Road Ahead

With this move, Honeywell aims to enhance efficiency, improve shareholder value, and allow each business to focus on its core strengths. The split marks another chapter in the ongoing transformation of U.S. industrial giants adapting to modern market demands.

Source

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