UPS to lay off 20,000 employees, shut down facilities as it reduces Amazon shipments
United Parcel Service
(UPS) has announced its plans to cut nearly 20,000 jobs and close 73 facilities by the end of June. This move comes after the biggest package delivery company in the world decided to sharply cut back on the shipments from its largest customer,
Amazon
. The company announced that it expects the job cuts to take place this year and the facility closures, across both leased and owned sites, by June 30. UPS is still reviewing its network and may identify additional locations for shutdown. As per FactSet data, the company employs about 490,000 workers. The upcoming job cuts will reduce UPS' workforce by slightly over 4%. This decision follows the company's announcement to cut 12,000 positions last year.
What UPS said about the job cuts
In a statement to the news agency Reuters, a UPS spokesman said the job cuts reflect a 50% reduction in shipping volume from Amazon, its largest customer, combined with broader cost-cutting and efficiency initiatives as part of a major operational restructuring.
In its recent regulatory filing, the company said that cuts are in "connection with our anticipation of lower volumes from our largest customer.'
UPS CEO Carol Tome
said:
'The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.'
This decision follows a slowdown in economic growth and mounting recession fears driven by Trump's aggressive trade policies.
"The world hasn't been faced with such enormous potential impacts to trade in more than 100 years,"
Tome noted during the company's latest earnings call.
UPS CFO Brian Dykes added:
"These actions will enable us to expand our US Domestic operating margin and increase profitability.'
In January, UPS agreed with Amazon to reduce the volume it handles by more than 50% by the second half of 2026. Speaking on the fourth-quarter earnings call, Tome noted that after nearly 30 years of partnership, the renewal of Amazon's contract this year prompted a reassessment of the relationship.
'Amazon is our largest customer but it's not our most profitable customer. Its margin is very dilutive to the U.S. domestic business,'
Tomé said at the time.
Meanwhile, an Amazon spokesperson said to Reuters:
'Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision.'
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