UPS cutting jobs has become a major topic in 2025 after the global logistics giant announced it will eliminate 20,000 positions this year. The move comes amid a strategic shift in operations, primarily tied to a significant reduction in package deliveries from its largest customer, Amazon.
This dramatic cost-cutting initiative is part of UPS’s broader plan to increase profitability and streamline its operations. The company currently employs about 490,000 people across more than 200 countries, meaning this round of layoffs will affect over 4% of its workforce. It follows a separate announcement in 2024 where 12,000 jobs were already slashed.
Why is UPS Cutting Jobs?
The key reason for UPS cutting jobs is the company’s deliberate choice to scale back its package volume from Amazon. UPS stated that this decision supports their focus on “revenue quality” and operational margin improvements in the U.S. domestic market.
Alongside job cuts, UPS plans to close 73 facilities by June 2025 and may shutter additional sites in the future. These actions are aimed at consolidating resources and enhancing cost efficiency.
“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” said Brian Dykes, UPS CFO, during a recent earnings call.
According to a regulatory filing, the job cuts align with UPS’s expectation of decreased volume from Amazon deliveries. The company projects it will save $3.5 billion in 2025 through these consolidation efforts.
UPS vs. Teamsters: Contractual Tensions
The Teamsters union has responded firmly to the announcement. Under the current national master agreement, UPS is required to create 30,000 union jobs.
“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” said Sean M. O’Brien, Teamsters general president. “But if the company intends to violate our contract or go after good-paying Teamsters jobs, UPS will be in for a hell of a fight.”
This underscores rising labor tensions as UPS shifts its workforce strategy while remaining bound by union obligations.
Amazon Relationship Still Intact—But Evolving
Despite the downsizing, UPS maintains a “strong working relationship” with Amazon. Earlier this year, the companies agreed to reduce UPS’s Amazon package volume by over 50% in the second half of 2026.
A UPS spokesperson confirmed this decision was part of a broader effort to improve profitability rather than a breakdown in the partnership. Amazon also stated that it respected UPS’s operational decision and would continue working with multiple carriers to serve its customers.
Interestingly, Amazon claimed it had offered to increase delivery volumes with UPS before the shipping company opted to pull back.
“Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision,” said Amazon spokesperson Kelly Nantel.
Impact on UPS’s Daily Operations
UPS moves an enormous volume of packages daily. In 2024 alone, it handled 22.4 million packages per day, totaling over 5.7 billion parcels for the year. Even a modest drop in Amazon deliveries represents a significant shift in daily logistics operations.
UPS stock dipped slightly following the announcement, falling $0.55 (0.6%) to $96.61 during Tuesday afternoon trading.
Wider Economic and Trade Pressures
Beyond labor and logistics concerns, UPS is also navigating geopolitical headwinds. The company warned of increased risk from evolving global trade policies. With ongoing tariff hikes, particularly from the Trump administration, UPS could see reduced international package flows.
Currently, UPS handles around 400,000 imported parcels daily, representing about 2% of its total volume. Still, these flows are vital, especially with routes like China-to-U.S., which account for 11% of UPS’s total international revenue and are considered the most profitable.
“Our China to U.S. trade lines are our most profitable trade lines,” noted UPS CEO Carol Tomé.
To help customers manage the complexity of global tariffs, UPS offers a tool called UPS Global Checkout, which estimates duties, taxes, and fees upfront for cross-border shoppers.
Amazon and the Tariff Debate
Amazon, too, is being drawn into the political fray. The Biden administration criticized the company for plans to display tariff costs on product listings, calling it “a hostile and political act.” Amazon pushed back, saying its Amazon Haul store was only exploring the option of disclosing import charges for price transparency.
This added layer of tension places both Amazon and UPS in the spotlight as they navigate cost optimization, political scrutiny, and consumer expectations in a volatile economy.
Conclusion
UPS cutting jobs in 2025 is more than a headline—it’s a reflection of deeper strategic and economic forces reshaping the logistics industry. As UPS reduces its reliance on Amazon shipments and consolidates operations, it aims to boost profit margins and future-proof its business. However, challenges remain, from union negotiations to global trade risks. The company’s next steps will be closely watched by investors, partners, and employees alike.