Part 5/11:
The Amazon Connection and Evolving Business Models
UPS's relationship with Amazon is particularly telling. The logistics company has been scaling back its Amazon-related operations, citing the lower margins associated with Amazon's package deliveries. UPS is three quarters into a six-quarter plan to move away from lower-margin business, focusing instead on higher-margin cargo and freight services.
Amazon, similarly, is reducing its workforce by approximately 14,000 jobs, aiming to become leaner and more cost-effective. This concurrent firing spree at both companies signals a broader industry trend: moving away from reliance on volume-driven, low-margin contracts toward profitable, high-margin services.