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Amazon Prime and UPS trucks are seen on a building in Washington DC, United States on July 12, 2024. 

Jakub Porzycki | Nurphoto | Getty Images

Shares of United Parcel Service plunged more than 17% Thursday after the company issued weak revenue guidance for the year and said it planned to cut deliveries for Amazon, its largest customer, by more than half.

The shipping giant said in its fourth-quarter earnings report that it “reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026.”

At the same time, UPS said it’s reconfiguring its U.S. network and launching multi-year efficiency initiatives that it expects will result in savings of approximately $1 billion.

UPS CEO Carol Tome said on a call with investors that Amazon is UPS’ largest customer, but it’s not the company’s most profitable customer. “Its margin is very dilutive to the U.S. domestic business,” she added.

“We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to become a more profitable, agile and differentiated UPS that is growing in the best parts of the market,” Tome said in a statement.

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Amazon spokesperson Kelly Nantel told CNBC in a statement that UPS had requested a reduction in volume “due to their operational needs.”

“We certainly respect their decision,” Nantel said in a statement. “We’ll continue to partner with them and many other carriers to serve our customers.”

Amazon said before the UPS announcement that it had offered to increase UPS’ volumes.

UPS forecast 2025 revenue of $89 billion, down from revenue of $91.1 billion in 2024. That’s well below consensus estimates for 2025 revenue of $94.88 billion, according to analysts polled by LSEG.

For the fourth quarter, UPS missed on revenue, reporting $25.30 billion versus $25.42 billion analysts anticipated in a survey by LSEG.

Amazon has long relied on a mix of major carriers for deliveries, including UPS, FedEx and the U.S. Postal Service. But it has decreased the number of packages sent through UPS and other carriers in recent years as it looks to have more control over deliveries.

Amazon has rapidly built up its own logistics empire since a 2013 holiday fiasco left its packages stranded in the hands of outside carriers. The company now oversees thousands of last-mile delivery companies that deliver packages exclusively for Amazon, as well as a budding in-house network of planes, trucks and ships. By some estimates, Amazon’s in-house logistics operations have grown to rival or exceed the size of major carriers.

UPS has, for its part, taken more aggressive cost-control measures, including catering to more profitable delivery customers. In recent quarters, UPS has benefited from an influx of volume from bargain retailers Temu and Shein, which have rapidly gained popularity in the U.S.

Last January, UPS laid off 12,000 employees as part of a bid to realize $1 billion in cost savings.

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Amazon shutters 4 Fresh stores in Southern California as grocery strategy keeps shifting

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Amazon shutters 4 Fresh stores in Southern California as grocery strategy keeps shifting

An employee arranges a salad dressing display at an Amazon Fresh grocery store on December 12, 2024 in Federal Way, Washington.

David Ryder | Getty Images

Amazon is closing four more Fresh supermarkets in Southern California as the e-commerce giant continues to focus its grocery strategy around Whole Foods and delivery.

The closures will take place in the coming weeks, Amazon confirmed to CNBC. They follow the shuttering of four other U.S. locations in recent months, in Washington, Virginia, New York and a Los Angeles suburb.

“Certain locations work better than others, and after an assessment, we’ve made the decision to close these Amazon Fresh locations,” Amazon spokesperson Griffin Buch said in a statement. “We’re working closely with affected employees to help them find new roles within Amazon wherever possible.”

At one Fresh supermarket in La Verne, California, employees were told to gather for an all-hands meeting on Wednesday, according to an internal message viewed by CNBC. They learned at the meeting that the store would close in mid-November, and that employees would receive a severance package, according to a person familiar with the matter who asked not to be named because the details were confidential.

The other three stores that are closing are in cities of Mission Viejo, La Habra and Whittier.

Last week, Amazon said it intends to close 14 Fresh grocery stores in the U.K. and convert its five other locations there into Whole Foods markets.

Amazon said it regularly evaluates its store portfolio, which can lead to opening, reopening, relocating or closing certain locations. In the U.S., the company has more than 60 remaining Fresh stores. Last year, the company removed its “Just Walk Out” cashierless technology from the stores. It’s also been culling its footprint of Go cashierless convenience stores.

Amazon has been determined to become a major grocery player for nearly two decades. The company launched Amazon Fresh in 2007, then a pilot project for fresh food delivery, before acquiring upscale chain Whole Foods for $13.7 billion in 2017, its biggest purchase on record.

Amazon debuted its Fresh grocery chain in 2020, with an eye toward mass-market shoppers. The rollout has been turbulent since its early days.

The company opened a flurry of Fresh locations by 2022, but the expansion plans ran into CEO Andy Jassy’s widespread cost-cutting efforts as the company reckoned with the impact of rising interest rates and soaring inflation. In 2023, Amazon announced it would shut some Fresh stores and halt further openings temporarily as it evaluated how to make the chain stand out for shoppers.

While it’s closing Fresh stores, Amazon continues to “innovate and invest in making grocery shopping easier, faster, and more affordable,” Buch said. The company still maintains 500 Whole Foods locations and has opened mini “daily shop” Whole Foods stores in New York City.

On Wednesday, Amazon also launched a new “price-conscious” grocery brand that will be offered online and in its physical stores. And last month, Amazon expanded same-day delivery of fresh foods to more pockets of the U.S.

Jassy and other company executives have touted the success of sales of “everyday essentials” within its online grocery business, which refers to items such as canned goods, paper towels, dish soap and snacks. Jassy told investors at the company’s annual shareholder meeting in May that he remains “bullish” on grocery, calling it a “significant business” for Amazon.

WATCH: Amazon grocery could be a trojan horse to more revenue

Amazon's grocery could be a trojan horse to move revenue higher, says Evercore ISI's Mark Mahaney

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Quantum stocks Rigetti Computing and D-Wave surged double-digits this week. Here’s what’s driving the big move

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Quantum stocks Rigetti Computing and D-Wave surged double-digits this week. Here's what's driving the big move

Inside Google’s quantum computing lab in Santa Barbara, California.

CNBC

Quantum computing stocks are wrapping up a big week of double-digit gains.

Shares of Rigetti Computing, D-Wave Quantum and Quantum Computing have surged more than 20%. Rigetti and D-Wave Quantum have more than doubled and tripled, respectively, since the start of the year. Arqit Quantum skyrocketed more than 32% this week.

The jump in shares followed a wave of positive news in the quantum space.

Rigetti said it had purchase orders totalling $5.7 million for two of its 9-qubit Novera quantum computing systems. The owner of drugmaker Novo Nordisk and the Danish government also invested 300 million euros in a quantum venture fund.

In a blog post earlier this week, Nvidia also highlighted accelerated computing, which it argues can make “quantum computing breakthroughs of today and tomorrow possible.”

Investors have piled into quantum computing technology this year, as tech giants Microsoft, Nvidia and Amazon have embraced the technology with a wave of new chip announcements, multi-million dollar investments and research plans.

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Quantum computing is the most radical technology in history: Bank of America's Haim Israel

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How to get Sora app invite codes for OpenAI’s viral AI video creator

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How to get Sora app invite codes for OpenAI's viral AI video creator

Cfoto | Future Publishing | Getty Images

OpenAI’s new artificial intelligence video app Sora has already grabbed the top spot in Apple‘s App Store as its number one free app, despite being invite-only.

Sora, which was launched on Tuesday, allows users to create short-form AI videos and share them in a feed. The app is available to iPhone users but requires an invite code to access.

Here’s how to snag a Sora app invite code:

  • First, download the app from the iOS App Store. Note that Sora requires iOS 18.0 or later to be downloaded.
  • Login using your OpenAI account.
  • Click “Notify me when access opens.”

A screen will then appear asking for an access code.

Currently, OpenAI has said that it is prioritizing paying ChatGPT Pro users for Sora access. The app is only available in the U.S. and Canada, but is expected to roll out to additional countries soon, the company said.

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If you do not know someone who can provide an access code, several people are sharing invite codes on the official OpenAI Discord server, as well as on X and Reddit threads.

Once you input your access, you will be able to start generating AI videos using text or images. Users are also able to cameo as characters in their videos as well as “remix” other posts.

The app is powered by the new Sora 2.0 model, an updated version of the original Sora model from last year. The video generation model is “physically accurate, realistic, and more controllable” than prior systems, the company said in a blog post.

OpenAI's Sora 2 sparks AI 'slop' backlash

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