UPS will close about 200 distribution centers over three years and expand sites in Massachusetts, New York and Texas as part of a wide-ranging program to cut costs as delivery volumes have not recovered since a pandemic-era decline.
The Atlanta-based package delivery company said during a March 26 presentation to investors that the site closings will come as UPS automates more of its distribution operations. UPS is using artificial intelligence software and advanced robotics to improve efficiency in how it sorts and ships packages.
During the investor presentation, the company estimated that property closings and increased use of automation will result in $3 billion of yearly savings by the end of 2028.
UPS did not identify the roughly 200 locations marked for closure or provide a detailed timeline for the shutdowns. UPS earlier this year said it planned to lay off about 12,000 workers to save about $1 billion and order employees to work in a company office five days a week.
“We plan to make bold moves to create a growth flywheel in premium markets, while at the same time drive higher productivity and efficiency,” CEO Carol Tomé said in a March 26 news release.
The US Postal Service, a UPS rival, is pursuing a similar strategy of closing distribution centers as it automates sorting and other operations. The Postal Service is spending about $40 billion on the program, which includes acquiring and leasing new properties and closing sites.
In the presentation, UPS highlighted New England, New York and Texas where properties are slated for closure or expansions.
UPS will close a 1960s-era facility in Worcester, Massachusetts, and build a new, larger property in the same city. UPS did not provide additional details about the Worcester project during the presentation.
In a map included in the slide presentation, UPS appears to suggest that facilities in Ashland and Leominster, Massachusetts; Nashua, New Hampshire; and Windsor, Connecticut; will be closed and their operations moved to Worcester.
Company spokesman Brian Hughes declined to confirm or deny whether UPS will close or cut jobs at those specific facilities.
In Texas, UPS will close its Chalk Hill sorting facility at 4495 DFW Turnpike in Dallas and increase automation and cut jobs at a facility in Mesquite, according to the presentation.
UPS will close its New York Capital Village facility in Albany and automate and cut jobs at separate facilities in Albany and Syracuse, according to the presentation.
Hughes also declined to provide additional details to CoStar News about UPS’ plans for New York and Texas.