UPS is slashing 20,000 jobs, roughly 4% of its global workforce, by the end of 2025, citing a shift in business strategy and increased automation, not tariffs. The announcement came Tuesday as part of the company’s broader restructuring efforts under CEO Carol Tomé.
The move includes plans to close 73 U.S. buildings by June and automate hundreds of facilities to reduce dependence on labor. “With this reconfiguration, we will also lessen our dependency on labor,” Tomé said. UPS aims to streamline operations with tech upgrades that include automated sorting, label application, and truck loading.
A major driver behind the layoffs is UPS’s decision to scale back its relationship with Amazon. The company had previously outlined a “glide down” strategy in January to cut Amazon-related business in half by mid-2026. Tomé reaffirmed that much of the Amazon volume being shed was “not profitable for us, nor a healthy fit for our network.”
Amazon package volume dropped 16% in Q1, exceeding UPS’s initial forecasts. While this reduction helped UPS pivot toward more profitable segments, it also contributed to lower expected revenues in the second quarter.
Though Trump’s recent 145% tariffs on Chinese imports and 10% on other goods have impacted global trade, UPS says the job cuts are not directly tied to the new trade policies. However, Tomé acknowledged uncertainty in how tariffs could affect customers down the road. “There’s so much uncertainty around the China orders,” she said, noting that many clients are in wait-and-see mode, hoping for a potential rollback.
Even with inflation concerns and cautious consumer sentiment, UPS believes the market remains resilient. “The consumer is still pretty healthy,” Tomé added, but warned that tariff-related ripple effects could influence business later in the year.
UPS has not revised its full-year financial guidance yet but indicated it could do so depending on how the back half of 2025 plays out.
The job cuts, combined with automation and strategic client realignment, mark a pivotal moment for UPS as it adapts to post-pandemic logistics demands, shifting e-commerce trends, and increased competition from Amazon’s own delivery operations.
Whether this leaner, tech-powered UPS delivers on profitability remains to be seen, but the company is clearly betting big on reinvention.
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