In a major corporate restructuring, UPS announced plans to cut 20,000 jobs this year—marking its second round of layoffs in less than 12 months—as the shipping giant grapples with declining package volumes from its largest customer, Amazon.
Why the Massive Job Cuts?
The layoffs, affecting 4% of UPS’s 490,000-strong workforce, come alongside plans to close 73 facilities by mid-2025. The company cited:
- Reduced Amazon shipments (volume to drop 50%+ by late 2026)
- Cost-saving goals ($3.5B in projected savings)
- Operational consolidation to boost profit margins
“These actions will expand our U.S. Domestic operating margin and increase profitability,” said CFO Brian Dykes during an earnings call.
Amazon’s Role in UPS’s Downsizing
Despite Amazon accounting for 11% of UPS’s revenue, the shipping giant chose to reduce its dependence on the e-commerce titan:
- Amazon claims it offered to increase UPS volumes before the cutback decision
- UPS insists the move aligns with its focus on higher-margin deliveries
- “We’ll continue to partner with [UPS] and other carriers,” said Amazon’s Kelly Nantel
Union Backlash Looms
The Teamsters Union, representing UPS workers, warned of a “hell of a fight” if layoffs violate their contract, which mandates 30,000 new union jobs.
- “If UPS targets Teamsters jobs, they’ll regret it,” vowed union president Sean O’Brien
Global Trade Risks Add Pressure
UPS also flagged tariff wars as a growing threat:
- China-U.S. trade lanes = 11% of international revenue
- Trump’s new tariffs could disrupt 400,000 daily imports
- Amazon’s tariff display plan sparked White House backlash (“a hostile act”)
What’s Next for UPS?
- More facility closures likely
- Shift toward higher-value logistics over mass Amazon deliveries
- Stock dip: Shares fell 0.6% post-announcement