The United Parcel Service announced that it is eliminating 20,000 jobs as part of a cost-cutting effort in response to decreased business from its largest customer, Amazon. Along with the staffing cuts, the global logistics giant, which operates in over 200 countries, is also set to close 73 of its buildings by the end of June, with further closures possible beyond that date.
According to CBS, the layoffs amount to a cut of around 4% of the company’s workforce of 490,000 employees globally. UPS’s chief financial officer, Brian Dykes, stated in an earnings call that the move was made “to expand our U.S. Domestic operating margin and increase profitability.” UPS recorded an operating profit of $979 million in its Q1 2025 earnings report with the SEC, beating its own estimates. That same report states that the company expects to save around $3.5 billion this year through the cuts.
The Q1 2025 earnings report also warns that its projections are subject to “risks and uncertainties,” including “changes in the global trade policy and new or increased tariffs.” These last would also explain why UPS is acting “in anticipation of lower volumes” from Amazon.
The ongoing trade war started by the Trump administration is creating problems for both companies. Amazon recently caught the ire of the White House, after a report emerged stating that the e-commerce giant would start displaying tariff costs alongside a product’s price, as many of its goods are imported from China. Top officials at UPS have also expressed concern, with UPS CEO Carol Tomé saying in an earnings call on Tuesday that “our China to U.S. trade lines are our most profitable trade lines,” representing about 11% of the company’s international revenue. UPS has added a tool on its website that calculates extra costs from duties and tariffs for shipments, but has managed to avoid the criticism from the Trump administration.
Amazon and UPS’s new challenges in the face of the Trump administration’s tariffs follows a pre-existing plan from the logistics firm to disentangle a great deal of its ties with the online retailer. “Amazon is our largest customer but it’s not our most profitable customer,” UPS CEO Carol Tomé stated in an earnings call in January. She went on to say that “it’s time to step back for a moment and reassess our relationship” with Amazon, announcing a plan to lower its volume with the company by more than 50% by the second half of 2026.
UPS’s layoffs are also raising questions about its agreements with organized labor, as the company is contractually obligated to create 30,000 union jobs under the existing national master agreement. “If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” Teamsters general president Sean O’Brien said. “But 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.” UPS has told Reuters that it plans to adhere to the agreement.
