UPS cutting 20,000 jobs amid reduction in Amazon shipments

UPS announced on Tuesday its plans to cut 20,000 jobs this year as part of a cost-cutting effort linked to delivering fewer packages from Amazon, its largest customer. With operations in over 200 countries, UPS currently employs around 490,000 people, and the layoffs will affect slightly over 4% of its workforce. This comes after a previous announcement last year that the company would cut 12,000 positions.

The move is part of UPS’s strategy to consolidate its facilities and workforce. In addition to the job cuts, the company will also close 73 buildings by the end of June 2025 and may target more for closure in the future. Brian Dykes, UPS’s CFO, mentioned during an earnings call that these actions are aimed at expanding the domestic operating margin and increasing profitability.

The decision to reduce package volume from Amazon was made as UPS focuses on revenue quality and profitability. The company had reached an agreement with Amazon to decrease delivery volume by over 50% in the second half of 2026. Amazon, in response, stated that they have a strong working relationship with UPS and had offered to increase volumes before the delivery company decided to reduce shipments.

Despite these changes, UPS remains a key player in the global trade landscape. The company handles a significant number of imported parcels daily, and any shifts in global trade policy, particularly between China and the U.S., could impact its operations. CEO Carol Tomé highlighted the importance of the China to U.S. trade lanes as the most profitable for UPS.

To keep customers informed about tariff developments, UPS has introduced tools like UPS Global Checkout, showing online shoppers upfront costs for duties, fees, and taxes. Amazon has also faced scrutiny over tariffs, with reports of plans to display tariff costs next to product prices. The company denied these claims, stating that it never approved such a move.

As UPS navigates these changes and challenges in the delivery and trade sectors, it remains committed to adapting its operations to ensure efficiency and profitability. The job cuts and facility closures are part of a larger strategy to streamline operations and enhance financial performance in a dynamic business environment.