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On Tuesday, UPS announced plans to eliminate 20,000 jobs this year as part of a broader initiative aimed at reducing costs, a move primarily linked to a decrease in package deliveries from Amazon, its largest client.
With a workforce of approximately 490,000 employees operating across more than 200 countries, the layoffs will affect just over 4% of its employees. This announcement follows last year’s decision to cut 12,000 positions, underscoring ongoing adjustments within the company.
The restructuring will not only involve job reductions but also the closure of 73 facilities by mid-2025, with the possibility of additional buildings being targeted for closure. “These measures will help enhance our U.S. Domestic operating margin and boost profitability,” stated Brian Dykes, UPS’s Chief Financial Officer, during a recent earnings call.
According to a regulatory filing, the current job cuts are a response to expected lower shipment volumes from Amazon. The company reported $21.5 billion in revenue for the last quarter and anticipates saving $3.5 billion this year as part of its consolidation efforts.
Sean M. O’Brien, General President of the Teamsters, emphasized that UPS has a contractual obligation to create 30,000 Teamsters jobs under their existing national master agreement. “While the Teamsters will not oppose UPS if it chooses to downsize corporate management, any violation of our contract or attempts to target well-paying Teamster jobs will lead to significant conflict,” he warned.
Amazon’s Relationship with UPS
In January, UPS disclosed an agreement with Amazon to decrease delivery volume by over 50% in the latter half of 2026. A spokesperson for UPS remarked that this decision reflects the company’s focus on improving revenue quality and increasing domestic operating margins.
Amazon responded by asserting its strong partnership with UPS and indicated that it had proposed to increase package volumes prior to UPS’s decision to cut shipments. “We respect their operational needs and will continue to collaborate with them and other carriers to meet customer demands,” added Kelly Nantel, an Amazon spokesperson.
UPS has a significant presence in global logistics, delivering approximately 22.4 million packages daily, totaling 5.7 billion for the previous year. Following the recent announcement, UPS shares fell by 55 cents, or 0.6%, closing at $96.61.
Increasing Trade Risks
In its quarterly earnings report, UPS also highlighted risks posed by alterations in global trade policy. New tariffs introduced by the Trump administration have begun affecting international goods movement, with UPS managing about 400,000 imported parcels daily, representing about 2% of its daily operations.
Continued tensions in the U.S.-China trade relationship could further impact UPS’s operations. “Revenue from our China to U.S. trade routes accounted for 11% of our total international revenue last year,” noted CEO Carol Tomé during the earnings call, emphasizing the profitability of these routes.
UPS is actively keeping its customers informed about tariff changes via its website. The company has also launched a tool called UPS Global Checkout, which provides online shoppers with immediate information regarding duties, fees, and taxes.
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