UPS has announced plans to eliminate 20,000 jobs this year as part of a sweeping cost-reduction strategy tied to a significant decrease in package volumes from Amazon—its largest customer. The move marks a major shift for the delivery giant, which operates in more than 200 countries and currently employs approximately 490,000 people. The layoffs, which account for just over 4% of its global workforce, follow a previous round of cuts in 2024 that affected 12,000 employees.
In a statement on Tuesday, UPS revealed that the job cuts are part of a broader initiative to streamline operations, consolidate facilities, and boost profitability. The company also plans to close 73 buildings by the end of June 2025 and is evaluating additional closures to further trim expenses.
“These actions will enable us to expand our U.S. domestic operating margin and increase profitability,” UPS Chief Financial Officer Brian Dykes said during an earnings call on Tuesday morning.
According to a regulatory filing, the company said the job reductions are tied to “anticipated lower volumes from our largest customer.” While UPS reported a solid $21.5 billion in revenue for the most recent quarter, executives project the consolidation strategy will save $3.5 billion this year alone.
Labor leaders are already responding. Sean M. O’Brien, president of the International Brotherhood of Teamsters, emphasized that UPS is contractually obligated to create 30,000 union jobs under its national master agreement.
“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” O’Brien said. “But if the company violates our contract or threatens union jobs, UPS will face a serious battle.”
Amazon Relationship Recalibrated
The shake-up comes on the heels of UPS’s January announcement that it had reached an agreement with Amazon to significantly reduce package volume—by more than 50%—in the second half of 2026. While Amazon remains a crucial client, UPS emphasized that the decision to pull back was strategic.
“The reduction in Amazon volume was a choice we made to focus on improving revenue quality and boosting margins,” a UPS spokesperson told CBS MoneyWatch.
Amazon, for its part, said it maintains a “strong working relationship” with UPS and had even offered to increase package volume before the carrier decided to scale back.
“Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision,” said Amazon spokesperson Kelly Nantel. “We’ll continue to partner with them and other carriers to serve our customers.”
UPS, which delivered an average of 22.4 million parcels per day in 2024—or roughly 5.7 billion packages annually—remains a central player in the global logistics space. Despite the volume changes, its presence in the market remains significant.
The company’s stock dipped slightly following the news, falling 55 cents, or 0.6%, to $96.61 in Tuesday afternoon trading.
Tariff Pressures and Trade Risks
In addition to labor and operational shifts, UPS is also contending with growing uncertainty around global trade. During the earnings call, CEO Carol Tomé flagged recent changes to U.S. trade policy as a concern. The Trump administration’s new tariffs have started to impact the flow of international goods—something that could affect UPS’s bottom line.
“Revenue from our China-to-U.S. trade lanes made up 11% of our international revenue last year—and they remain our most profitable,” Tomé said.
UPS handles around 400,000 imported parcels daily, and while that’s only about 2% of total package volume, trade disruptions could still pose a significant risk.
To help customers manage changing tariff rules, UPS launched a digital tool called UPS Global Checkout, which shows shoppers the upfront cost of duties, taxes, and fees on international purchases.
Amazon, too, is under scrutiny for its handling of tariffs. On Tuesday, White House press secretary Karoline Leavitt criticized the company following reports that it considered displaying tariff costs next to product prices—a move she labeled “hostile and political.”
Amazon pushed back, stating that while the idea was discussed for its Amazon Haul platform, it was never implemented and will not move forward.
UPS to Cut 20,000 Jobs in 2025
🔹 Key Reasons:
- Reduced Amazon Deliveries: UPS is scaling back its package volume from Amazon by over 50% by late 2026.
- Cost-Saving Plan: The cuts are part of a $3.5 billion cost-reduction strategy.
- Operational Restructuring: Includes closure of 73 UPS buildings by June 2025.
🔹 Company Snapshot:
- 🌍 Operates in over 200 countries
- 👥 Workforce: 490,000+
- 📉 Layoffs impact: 4%+ of total employees
- 📦 2024 Daily Deliveries: 22.4 million parcels
🔹 Financials & Goals:
- 📊 Q1 2025 Revenue: $21.5 billion
- 💰 Target: Improve U.S. operating margins and profitability
🔹 Amazon Relationship:
- ✅ Still partners, but UPS requested lower volume.
- 🛍️ Amazon: “We respect their decision, and continue to work with multiple carriers.”
🔹 Labor Union Response:
- ⚠️ Teamsters President Sean O’Brien warns:
- UPS must honor contract creating 30,000 Teamsters jobs.
- “Teamsters won’t tolerate attacks on union positions.”
🔹 Trade & Tariff Risks:
- 🌐 UPS warns of global trade instability due to tariffs.
- 🇨🇳 China-U.S. trade lanes = 11% of international revenue
- 🚚 Imports handled: 400,000 parcels/day
🔹 Customer Tools:
- 🛒 UPS Global Checkout launched to show:
- Upfront taxes, fees, and duties for international shoppers.
🔹 Stock Movement:
- 📉 UPS shares fell 0.6% to $96.61 after the announcement.