UPS will cut about 20,000 jobs this year and close 73 buildings, part of a major cost-cutting effort tied to fewer package deliveries from Amazon. The job cuts represent just over 4% of the company’s workforce. They are part of its larger’ Network of the Future’ strategy, which includes running fewer buildings, using more automation, and making the business more profitable.
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The company said the changes will save $3.5 billion in 2025. UPS currently has around 490,000 employees worldwide.
“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” said Brian Dykes, Chief Financial Officer of UPS, during an earnings call Tuesday morning.
“Amazon is our largest customer, but it’s not our most profitable customer,” said CEO Carol Tomé. “The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier.”
The company also said the move has nothing to do with tariffs or trade policy, though those risks are on UPS’s radar. “There’s so much uncertainty around the China orders,” Tomé said. “We know what’s been announced. We don’t know actually if it will happen, and we don’t know if it will stick.”
UPS delivers around 22 million packages each day, or about 5.7 billion per year. Amazon deliveries made up over 10% of its business last year. In January, UPS and Amazon agreed to cut that volume in half by mid-2026. UPS has already seen a 16% drop in Amazon shipments this past quarter.
The Teamsters Union, which represents more than 300,000 UPS hourly workers, warned the company not to violate their labor agreement. “If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” said Sean O’Brien, Teamsters General President. “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.”
UPS says it plans to close the 73 buildings by the end of June and may shut down more facilities later in the year.
