UPS announces sweeping layoffs, facility closures

UPS will lose 20,000 positions this year, accounting for nearly 4% of its global workforce, the firm announced Tuesday. However, UPS stated that the decision is unconnected to tariffs and is the result of improved use of technology and a previously disclosed strategy to reduce its Amazon business.

UPS revealed in January a "glide down" strategy to decrease its contract with Amazon, its largest client, in half by mid-2026. UPS CEO Carol Tome stated on Tuesday that the majority of the Amazon business it is giving up is "not profitable for us, nor a healthy fit for our network."

UPS shipment volume from Amazon was already down 16% in the recently ended quarter, a larger reduction than UPS had predicted for the time. UPS announced it will shut 73 US facilities by the end of June as part of its "glide down" plan.

Carol Tomé stated that the cuts will help the shipping giant adapt to the impact of President Trump's sweeping tariffs, which have upended the global economy.

“The world has not been faced with such enormous potential impacts to trade in more than 100 years,” Tomé said on the company’s earnings call. "The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS."

Tome stated that clients that conduct a lot of business with China are "not thinking about exiting the business." However, she said that many of them are unsure about their future steps. Many people are still expecting for a tariff rollback.

“Candidly, there’s so much uncertainty around the China orders,” she said. “We know what’s been announced.  We don’t know actually if it will happen, and we don’t know if it will stick. We think there are many things we don’t know.”

UPS plans to save $3.5 billion in 2025 as a result of these changes. FactSet reports that the corporation has around 490,000 employees.

The news came accompanying UPS's first-quarter 2025 earnings report, which showed a minor revenue decline to $21.5 billion, down 0.7% from the same period last year. UPS's adjusted operating profit rose 0.9% to $1.7 billion.

UPS also stated that it plans to deploy more automation at its facilities, ranging from package sorting and labeling to truck loading and unloading, with 400 sites being partially, if not totally, automated.

"With this reconfiguration, we will also lessen our dependency on labor," the woman stated.

UPS believes the tariffs will have an impact on its customers, and as a result of that, plus Amazon's pullback, it expects its own revenue to decline in the second quarter compared to the previous year. But it said it is not ready to drop its own full-year guidance, although it warned it could adjust that in the future as well.

“There’s so much uncertainty in the back half (of the year), because all those (tariffs) will ultimately impact the US consumer,” she said. “Current consumer sentiment is down from where it was at the beginning of the year.  (But) the consumer is still pretty healthy.”