UPS Announces Significant Job Cuts Amid Strategic Shift Away from Amazon

UPS announced on Tuesday its plan to lay off 20,000 employees this year as part of a sweeping cost-reduction initiative linked to its decision to deliver fewer packages from Amazon, its largest client. Operating across more than 200 countries, UPS currently employs about 490,000 individuals, and these cuts will affect just over 4% of its workforce. This follows last year’s announcement to reduce its workforce by 12,000 positions.

In line with streamlining efforts, UPS plans to consolidate its facilities and workforce. As part of this strategy, the company will shut down 73 buildings by the close of June 2025 and may consider additional closures.

“These measures will help us boost our U.S. Domestic operating margin and enhance profitability,” stated Brian Dykes, UPS’s Chief Financial Officer, during a Tuesday morning earnings call.

In a regulatory filing on the same day, UPS attributed the cuts to “our anticipation of lower volumes from our largest customer.” Reporting $21.5 billion in revenue for the previous quarter, the company anticipates saving $3.5 billion this year due to its consolidation plans.

Sean M. O’Brien, President of the Teamsters union, remarked that UPS is contractually bound to create 30,000 Teamster jobs under their national master agreement.

“If UPS wants to reduce corporate management, the Teamsters won’t interfere,” O’Brien pointed out. “But if it violates our contract or threatens good-paying Teamsters jobs, UPS will confront serious opposition.”

Earlier this year, UPS disclosed reaching an agreement with Amazon to significantly reduce delivery volume by over 50% in the latter half of 2026.

UPS chose this reduction of Amazon package volume to focus on revenue quality and boost its domestic operating margin and profitability,” a UPS spokesperson informed CBS MoneyWatch via email.

An Amazon representative communicated to CBS MoneyWatch via email that the companies maintain a “strong working relationship” and that Amazon had even offered to increase UPS’s volumes before the delivery company opted to cut back on Amazon shipments.