In a move that exemplifies the financial disruptions plaguing our economy, UPS plans to slash 20,000 jobs and shutter 73 facilities this year in response to declining Amazon shipments.
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The logistics giant’s pivot raises questions about our trade policies and reliance on global entities like Amazon.
The logistics giant announced the job cuts on April 29, citing a significant reduction in Amazon shipments handled by the company.
UPS intends to shut down 73 buildings by the end of June, targeting optimization of operations.
This decision directly reflects broader economic upheavals, particularly the unpredictable macroeconomic scene prompted by recent trade frictions and tariffs.
UPS’s measures represent not just a trimming of excess, but a strategic pivot amidst changing trade dynamics.
Amazon, UPS’s largest customer, is not its most profitable, and UPS reached an agreement to reduce shipment volumes by over 50% by the latter half of 2026.
The company’s intention to further close facilities indicates an aggressive strategy focused on cutting costs while adapting to evolving market conditions.
Amazon contributed 11.8% of UPS’s revenue in 2024, a number UPS appears keen to reduce as it works to diversify and stabilize its financial footprint.
Carol Tomé, CEO of UPS, emphasized that the time to act is now.
The planned cuts represent a modest 4% of UPS’s 490,000-strong workforce, including 12,000 previously announced reductions.
The company expects a decline in shipping demand, sparked by slowed global trade associated with increased tariffs.
The goal is to save $3.5 billion in 2025 by correcting oversized logistical networks and scaling down Amazon reliance.
“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” Tomé stated, cited by ABC News.
In the first quarter, UPS reported $1.19 billion in earnings, or $1.40 per share, with adjusted earnings of $1.49 per share, surpassing analyst projections.
Revenue reached $21.55 billion, beating estimates, yet UPS remains cautious by withholding a full-year outlook, citing economic unpredictability.
The ambitious restructuring underlines UPS’s aim to emerge as a more resilient, adaptable operation, eschewing excessive dependency on any single source of revenue.
Amazon’s diminishing shipping volume presents a dual challenge: workload reduction doesn’t necessarily translate to profitability given its overall contribution to UPS’s revenue.
UPS expects to save $3.5 billion in 2025 after cutting 20,000 jobs and closing 73 leased and owned buildings by the end of June, the company announced in its first-quarter earnings report. (Photo: Robert Alexander via Getty Images) https://t.co/fkggzCB59J pic.twitter.com/FpRz429EWk
— Forbes (@Forbes) April 30, 2025
The broader context is a global marketplace adjusting to new trade policies, an ongoing tariff impact, and UPS’s response reflecting a tactical repositioning designed to maintain financial stability and gain operational flexibility in this new economic environment.
“By gliding that down, we actually give ourselves financial flexibility to address other scenarios that might come our way,” Carol Tomé explained, signaling a future where UPS may not be hampered by concentrating too heavily on a single client.
As UPS navigates these shifts, the company stresses resourceful adaptation as the landscape of trade continues to evolve and present new challenges.
