UPS to cut 20,000 jobs as it prepares to halve Amazon shipments

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UPS has said it will cut 20,000 jobs this year and close more than 70 buildings as the logistics group seeks to reduce costs and prepare for a halving in package volume from Amazon, its biggest customer.

The job cuts will target workers responsible for delivering packages to customers and supporting UPS’s transportation and logistics services, and come after the group last year cut about 14,000 jobs, primarily in management roles.

The latest reduction in headcount is part of UPS’s plan to boost efficiency and consolidate its US domestic network after it said in January it had reached an agreement in principle with its “largest customer” to lower its volume by the second half of 2026.

Amazon accounted for 12 per cent of UPS’s $91bn in revenue during 2024, according to the delivery company’s 10-K filing, mostly in the group’s US domestic package segment. Its own parcel volumes now rival those of UPS and FedEx.

In explaining the decision in January to reduce its business with the ecommerce group, UPS chief executive Carol Tomé told analysts: “Amazon is our largest customer, but it’s not our most profitable customer. Its margin is very dilutive to the US domestic business.”

In an effort to align its network with the coming decline in business from Amazon, UPS said on Tuesday it also expected to close 73 leased and owned buildings in 2025. It had previously indicated it would need to reduce its aircraft and vehicle fleets, too.

Management said the actions “could not be timelier”, as the company navigates the Trump administration’s tariffs on US trading partners. UPS declined to update its outlook for the year owing to macroeconomic “uncertainty”.

Tomé said UPS ships about 400,000 packages into the US each day, representing about 2 per cent of its total global average daily volume.

The US-China trade lines represented 11 per cent of the $18bn of revenue UPS’s international segment generated in 2024, she said. Other trade lanes shipping to the US made up about 18 per cent of the division’s revenue, with the remainder being entirely overseas.

The Atlanta-based company has about 490,000 employees globally, with almost 83 per cent of those based in the US, according to the group’s latest filing.

UPS said it expected $3.5bn of cost savings in 2025 from its plan and that it expected $400mn to $600mn of expenses this year related to early asset retirements, lease-related costs and employee separation benefits.

For the first three months of 2025, UPS reported net income of $1.2bn on a smaller than expected drop in revenue to $21.5bn.

UPS shares closed 0.4 per cent lower on Tuesday.