UPS Layoffs: Massive Downsizing Will Cut 20,000 jobs

20,000 Jobs Cut and 73 Facilities to Close

Major Restructuring Efforts Linked to UPS Layoffs

UPS has announced it will eliminate 20,000 jobs and shut down 73 facilities by mid-2025. These sweeping UPS layoffs are part of a broad restructuring plan aimed at cutting costs and adapting to a changing logistics landscape. The company expects the moves to generate $3.5 billion in savings this year.

UPS CEO Carol Tomé described the overhaul as necessary. “The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” she said in the company’s Q1 2025 earnings release.

Amazon Volumes Cut in Half

A major factor in UPS’s restructuring is its decision to reduce package volume from Amazon by 50%. While Amazon has long been UPS’s largest customer, the shipping giant says much of that work was unprofitable. A spokesperson from Amazon told Reuters, “Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision.”

The reduction is part of UPS’s broader strategy to shed lower-margin work and focus on efficiency. The company’s Q1 earnings report showed U.S. domestic revenue up slightly, at $14.46 billion, but package volume was down, and costs per package rose 3.7% compared to last year.

Tariff Pressure Adds to UPS Layoffs

UPS is also feeling the effects of newly imposed tariffs by former President Donald Trump, who returned to office earlier this year. A 145% tariff on many Chinese goods has raised concerns about slowing global trade. “The world hasn’t been faced with such enormous potential impacts to trade in more than 100 years,” said Tomé during the earnings call.

While China-to-U.S. deliveries make up only about 2% of UPS’s total volume, they account for 11% of its international revenue. With tariffs driving up prices for products from companies like Temu and Shein—along with Amazon’s China-based sellers—UPS could see further drops in volume. Many small retailers that rely heavily on Chinese suppliers are expected to struggle.

Teamsters Push Back on UPS Layoffs

The layoffs are likely to draw attention from the Teamsters union, which represents more than 75% of UPS’s U.S. workforce. Union President Sean O’Brien told Reuters that the company is contractually obligated to create 30,000 jobs under the current labor agreement. “If the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight,” O’Brien said.

UPS responded that it intends to comply with the agreement.

Earnings Show Mixed Picture Despite UPS Layoffs

UPS reported $21.5 billion in revenue for the first quarter of 2025, a slight decline from $21.7 billion the same time last year. Operating profit rose to $1.7 billion, while diluted earnings per share came in at $1.40. Adjusted for one-time costs, earnings per share stood at $1.49—slightly higher than last year’s $1.43.

However, its Supply Chain Solutions segment saw a sharp decline in revenue, dropping nearly 15% due in part to the sale of its Coyote Logistics division. Operating margins for that segment fell to just 1.7%.

Looking Ahead

UPS declined to offer full-year guidance due to ongoing economic uncertainty but said it expects an operating margin of around 9.3% in the second quarter. That’s below what investors typically want to see.

Despite near-term challenges, UPS says it is already seeing increased volume from other parts of Asia, including Vietnam and Thailand. Still, replacing trade with China will take time. Chief Financial Officer Brian Dykes warned that if tariff issues aren’t resolved soon, the result could be a “supply shock” that further disrupts the global economy.