UPS to Cut 20,000 Jobs as Amazon Shipment Volumes Decline

UPS announced Tuesday it will lay off 20,000 employees in 2025 as part of a broad cost-cutting strategy tied to reduced package volumes from Amazon, its largest customer.

The global shipping company, which employs about 490,000 people across more than 200 countries, said the layoffs will affect just over 4% of its workforce. This move follows last year's cut of 12,000 positions and is part of a larger consolidation effort that includes plans to close 73 facilities by June 2025, with the possibility of additional closures.

“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” said CFO Brian Dykes during an earnings call.

UPS disclosed in a regulatory filing that the job reductions are due to "anticipated lower volumes" from Amazon. Despite reporting $21.5 billion in revenue for the latest quarter, the company is targeting $3.5 billion in cost savings this year through these changes.

The cuts have drawn attention from the Teamsters union. Its president, Sean M. O’Brien, reminded UPS of its contractual obligation to create 30,000 union jobs under the current national agreement. “If UPS wants to downsize corporate management, the Teamsters won’t stand in its way. But we will fight any threat to our members' jobs,” he said.

In January, UPS and Amazon reached an agreement to reduce package volumes by over 50% starting in the second half of 2026. A UPS spokesperson said the company made this decision to prioritize “revenue quality” and margin improvement.

Amazon, in response, said it had actually offered UPS more volume, but respected the company’s operational decision. “We’ll continue to partner with UPS and other carriers to serve our customers,” said spokesperson Kelly Nantel.

UPS delivers more than 22 million packages per day globally, totaling over 5.7 billion annually. Following the announcement, shares dipped 0.6% to $96.61.

Global Trade Risks Also a Concern:

UPS also cited growing risks from global trade shifts, particularly as new U.S. tariffs impact import flows. The company handles about 400,000 imported packages daily and noted that 11% of its international revenue in 2024 came from China-to-U.S. shipments—its most profitable trade route.

To help customers manage new tariff costs, UPS launched a tool called Global Checkout, which provides upfront duty and tax estimates for international purchases.

Meanwhile, Amazon faced political scrutiny after reports suggested it may display tariff costs alongside product prices. A company spokesperson denied the plan was moving forward, stating it had been considered but not approved.