UPS on Tuesday announced it is planning to cut 20,000 jobs this year, part of a cost-cutting effort that’s linked to the delivery giant’s decision to deliver fewer packages from Amazon, its biggest customer.
The shipping company, which operates in over 200 countries, currently has around 490,000 employees. The layoffs will impact slightly over 4% of its workforce. This follows an announcement from UPS last year that it would cut 12,000 positions.
The move is part of the company’s plan to consolidate UPS’s facilities and workforce. Along with the job cuts, the company announced it will also close 73 of its buildings by the end of June 2025 and said that it may target additional buildings for closure.
“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” Brian Dykes, the chief financial officer of UPS said during an earnings call on Tuesday morning.
In a Tuesday regulatory filing, UPS said the cuts are in “connection with our anticipation of lower volumes from our largest customer.” The company, which announced $21.5 billion in revenue for this past quarter, expects to save $3.5 billion this year as a result of its consolidation plan.
According to Sean M. O’Brien, the Teamsters general president, UPS is contractually obligated to create 30,000 Teamsters jobs under their current national master agreement.
“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” 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.”
“Strong” relationship with Amazon
The company in January said it had reached an agreement with Amazon to decrease its delivery volume by more than 50% in the second half of 2026.
“The reduction of package volume from Amazon is something UPS chose to do as we focus on revenue quality, and increase domestic operating margin and profitability,” a UPS spokesperson told CBS MoneyWatch in an email.
Amazon said in an email to CBS MoneyWatch that the company has a “strong working relationship” with UPS and that it had actually offered to increase UPS’ volumes before the delivery company made the decision to reduce its Amazon shipments.
“Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision,” said Kelly Nantel, an Amazon spokesperson. “We’ll continue to partner with them and many other carriers to serve our customers.”
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