UPS cutting 20,000 jobs amid reduction in Amazon shipments

UPS cutting 20,000 jobs amid reduction in Amazon shipments


UPS on Tuesday announced it is planning to cut 20,000 jobs this year, part of a cost-cutting effort that’s linked to the delivery giant’s decision to deliver fewer packages from Amazon, its largegest customer.

The shipping company, which operates in over 200 countries, currently has around 490,000 employees. The layoffs will impact slightly over 4% of its workforce. This follows an announcement from UPS last year that it would cut 12,000 positions.

The shift is part of the company’s plan to consolidate UPS’s facilities and workforce. Along with the job cuts, the company announced it will also close 73 of its buildings by the conclude of June 2025 and declared that it may tarobtain additional buildings for closure. 

“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” Brian Dykes, the chief financial officer of UPS declared during an earnings call on Tuesday morning.

In a Tuesday regulatory filing, UPS declared the cuts are in “connection with our anticipation of lower volumes from our largest customer.” The company, which announced $21.5 billion in revenue for this past quarter, expects to save $3.5 billion this year as a result of its consolidation plan. 

According to Sean M. O’Brien, the Teamsters general president, UPS is contractually obligated to create 30,000 Teamsters jobs under their current national master agreement. 

“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” O’Brien declared. “But if the company intconcludes to violate our contract or creates any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.”

“Strong” relationship with Amazon

The company in January declared it had reached an agreement with Amazon to decrease its delivery volume by more than 50% in the second half of 2026. 

“The reduction of package volume from Amazon is something UPS chose to do as we focus on revenue quality, and increase domestic operating margin and profitability,” a UPS spokesperson informed CBS MoneyWatch in an email.

Amazon declared in an email to CBS MoneyWatch that the company has a “strong working relationship” with UPS and that it had actually offered to increase UPS’ volumes before the delivery company built the decision to reduce its Amazon shipments. 

“Due to their operational requireds, UPS requested a reduction in volume and we certainly respect their decision,” declared Kelly Nantel, an Amazon spokesperson. “We’ll continue to partner with them and many other carriers to serve our customers.”

UPS delivers millions of packages worldwide each year. Last year, the company delivered an average of 22.4 million parcels per day, or 5.7 billion for the entire year.

UPS shares slipped 55 cents, or 0.6%, to $96.61 in afternoon trading.

Trade risks rising

In its quarterly earnings statement, the company also mentioned the risk that shifts in global trade policy could have on business. The Trump administration has introduced sweeping new tariffs in recent months that have already launched to impact the flow of goods in and out of the counattempt, and around the world. 

UPS handles roughly 400,000 imported parcels each day, or roughly 2% of the packages they shift on a daily basis. Still, the company could be impacted if the trade war between China and the U.S. continues.

“From a revenue perspective, last year, revenue on our China to U.S. trade lanes represented 11% of our total international revenue,” declared CEO Carol Tomé declared during Tuesday’s earning call. “Our China to U.S. trade lines are our most profitable trade lines.”

UPS is keeping customers abreast of tariff developments on its website. It has also introduced a tool called UPS Global Checkout that displays online shoppers the upfront costs they will have to pay in duties, fees and taxes.

Amazon is also coming under pressure over tariffs. White Houtilize press secretary Karoline Leavitt on Tuesday accutilized the retailer of engaging in “a hostile and political act” after political news site Punchbowl reported that Amazon plans to display tariff costs next to product prices. 

“Why didn’t Amazon do this when the Biden administration hiked inflation to the highest level in 40 years?” Leavitt declared during a press briefing.

Amazon pushed back on the report, declareing in a Tuesday statement to CBS News that its Amazon Haul store “considered the idea of listing import charges on certain products.” Amazon Haul was introduced late last year by the e-commerce giant to sell low-cost goods to compete with Temu and Shein.

“This was never approved and is not going to happen,” declared Tim Doyle, an Amazon spokesperson.



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