UPS Announces Major Job Cuts Amid Amazon Shipping Decline
UPS revealed plans to lay off 20,000 employees as part of a cost-cutting initiative associated with reduced package deliveries from Amazon, its largest customer. This decision, impacting over 4% of the company’s 490,000-strong workforce, comes after UPS announced the elimination of 12,000 positions last year.
The shipping giant will also close 73 facilities by June 2025, potentially targeting more for closure as it aims to enhance profitability and streamline operations. Chief Financial Officer Brian Dykes stated that these changes are crucial for expanding UPS’s U.S. domestic operating margin.
Regulatory filings confirmed that the layoffs are closely tied to anticipated lower shipping volumes from Amazon, with UPS expecting to save approximately $3.5 billion this year due to its consolidation strategy. The decision aligns with a previously established agreement to cut delivery volume from Amazon by over 50% by the latter half of 2026.
Teamsters general president Sean M. O’Brien emphasized the potential conflict this move could create, citing UPS’s obligation to create 30,000 Teamsters jobs under their national contract. He warned that any attempts to reduce Teamsters’ positions would lead to a significant backlash.
In a statement, Amazon described its relationship with UPS as "strong" and noted that it had even offered to increase UPS volumes before the latter opted to reduce shipments, respecting UPS’s operational requirements.
Moreover, UPS’s quarterly earnings highlighted concerns about the impacts of ongoing global trade policy shifts and tariffs introduced by the Trump administration, which could affect their operations, particularly in international markets. As UPS navigates these challenges, shares dipped slightly to $96.61 amid ongoing market fluctuations.
