Podcast Summary: Bloomberg Intelligence

Episode Title: UPS Cutting Costs and Amazon Cutting Jobs
Date: October 28, 2025
Hosts: Paul Sweeney, Lisa Mateo (sitting in for Scarlet Fu)
Key Guests: Putam Goyal (Bloomberg Intelligence Senior US E-Commerce and Retail Analyst), Lee Klaskow (Senior Logistics Analyst, Bloomberg Intelligence), Sean McCarthy (CEO of BAM Mutual)

Overview

This episode delves into significant corporate moves by two logistics and e-commerce giants, Amazon and UPS, focusing on their recent job and cost-cutting strategies. Analysts from Bloomberg Intelligence break down the drivers behind these decisions, notably the rise of automation and AI, and their broader market impact. The team also briefly touches on the state of municipal bonds and related infrastructure spending.

Amazon’s Job Cuts and Automation

Main Discussion: [01:52 – 05:19]

Key Points

• Amazon’s Layoffs in Context

  • Amazon is cutting 14,000 jobs, viewed as significant but not “needle moving” given the company’s massive global workforce of 1.55 million.
    • Putam Goyal [02:27]: “Fourteen thousand is about 4% of its corporate workforce and even smaller when you look at it on a base of 1.55 million employees worldwide. So, still very small.”
  • The cuts are part of an ongoing trend since the pandemic, expected to continue as Amazon doubles down on automation and AI.

• AI and Automation as Catalysts

  • Investment in AI and automation, both to fuel growth and control rising Capex, is driving job reductions.
    • Putam Goyal [03:10]: “They’re continuing to invest in AI and Capex through AWS…how do they drive margin efficiencies? It’s through using some of those efficiencies and paring back on the employee headcount.”

• Long-term Impact of AI

  • AI is likely to be a net job taker across industries, raising concerns about workforce implications.
    • Paul Sweeney [03:33]: “Call me cynical, but…I believe in my opinion that AI is going to be a net job taker and I think in size too for a lot of industries.”

• Holiday Outlook and Amazon’s Market Position

  • Despite cuts, Amazon is expected to have a strong holiday season, outperforming peers in retail sales and continuing to take market share.
    • Putam Goyal [03:59]: “The consumer has been holding up relatively well. Spending is higher and we think Amazon’s continuing to take share…we do think that they’re going to take share once again this holiday season.”

• Andy Jassy’s Focus

  • Amazon CEO Andy Jassy is prioritizing long-term investments in AI and automation over short-term performance, aiming to maintain Amazon’s leadership amid intensifying online retail competition.
    • Putam Goyal [04:32]: “We really need to stay focused on the longer run. How does Amazon continue to remain the leader that it has been…The only way to do it is continue to invest in the future. And right now, that's AI.”

UPS: Cost Cutting, Automation, and Strategy Shifts

Main Discussion: [07:37 – 12:46]

Key Points

• UPS Job Cuts and Stock Reaction

  • UPS announced job cuts and cost-saving initiatives, leading to a positive market response: stock up 7.5% despite being down 24% YTD.
    • Paul Sweeney [07:37]: “UPS is in the news today. Reports and some numbers cutting some headcount. The street likes it. The stock’s up 7 1/2 percent…”

• Strategic Rationale

  • UPS aims to build a network resilient to changing environments—driven by e-commerce growth and tariff uncertainty—by leveraging technology and stepping back from low-margin Amazon business.
    • Lee Klaskow [08:10]: “Their plan really is to create a network that can not only handle but thrive in an ever changing environment…And that change is being driven by E commerce…whether it’s automation or AI.”
  • Stepping away from lower-margin Amazon shipments but retaining higher-value returns business.

• Details of Cost Savings and Cuts

  • UPS seeks $3.5 billion in 2025 cost savings—already achieving $2.2 billion—with a mix of early retirement for drivers and facility closures.
    • Lee Klaskow [09:57]: “They offered early retirement for some of their drivers…They’ve closed something like 90, 95 facilities so far. And that’s being driven by…they don’t need the network they had when they were really handling a lot of Amazon business.”
  • Expansion of automation: 66% of UPS packages now touch automated facilities, up 300 basis points year-over-year.

• Tariffs and Supply Chain Dynamics

  • Changes in tariffs—specifically, the elimination of de minimis exemptions for low-value imports—have cut China-to-U.S. package volume by ~20%, but bolster UPS’s customs business due to higher demand for brokerage services.
    • Lee Klaskow [11:34]: “They noted their China to U.S. volumes were down around 20%. And that’s having a negative impact…you’ve seen their supply chain business outperform this quarter…and the additional fees that they generate from helping shippers clear packages through customs.”

Municipal Bonds: Supply, Demand, Risks and Opportunities

Main Discussion: [15:04 – 21:01]

Key Points

• Robust Municipal Bond Issuance

  • 2025 is on track to be another record year for municipal bond issuance due to increased state and local infrastructure responsibilities.
    • Sean McCarthy [15:52]: “This year is going to be…another record. The growth of the business has been really robust. State and local governments…are being pushed down…to issue more infrastructure debt.”

• Infrastructure, AI, and Power Demand

  • The demand for municipal financing, especially in the power sector, is rising sharply due to infrastructure needs tied to data center and AI expansion.
    • Sean McCarthy [16:52]: “If you think about AI, the amount of power and data centers that are in their demands…is going to be four to ten times what they produce right now.”

• BAM Mutual’s Role in Credit Quality

  • BAM provides insurance on municipal bonds, enhancing credit certainty and aiding municipalities during difficulties.
    • Sean McCarthy [17:42]: “We guarantee timely payment of principal and interest when due. So that means if there is a credit event that would cause a default, we pay first and then mitigate later.”

• Sector Shifts and Credit Differentiation

  • While broad-based municipal credit risk is low, there are signs of differentiation—particularly in health care—due to changing reimbursement and care models.
    • Sean McCarthy [19:24]: “What you’re going to see…is a greater differentiation among credits…How they’re going to be affected by…Medicare and Medicaid payments and how technology changes the way health care is delivered…”

• Outlook and Performance

  • Interest from issuers remains strong, aided by stability in municipal bond tax status and favorable market conditions supporting refinancings if rates decline.

Notable Quotes & Memorable Moments

• “[AI and automation] will be the two biggest things that are going to drive the need for more efficiency and then give back to the company through fewer headcounts.”
  — Putam Goyal on Amazon’s strategy [03:10]

• “Their plan really is to create a network that can not only handle but thrive in an ever changing environment.”
  — Lee Klaskow on UPS’s cost cutting and automation [08:10]

• “If you think about AI, the amount of power and data centers that are in their demands…is going to be four to ten times what they produce right now.”
  — Sean McCarthy on infrastructure and power needs [16:52]

Key Segment Timestamps

• Amazon Jobs & AI Discussion: 01:52 – 05:19
• UPS Cost Cuts & Automation: 07:37 – 12:46
• Municipal Bonds & BAM Mutual: 15:04 – 21:01

Summary Flow

The episode provides an incisive look at how leading companies like Amazon and UPS are navigating cost pressures and technological transformation, with expert commentary on the market and operational implications. The discussion is rounded out with analysis of the municipal bond market, emphasizing infrastructure demand and sectoral shifts as technology reshapes traditional industries.

For listeners wanting actionable insights into the interplay of technology, labor, and finance in major American companies and markets, this episode is an insightful listen.