Parcel delivery giant UPS has announced plans to axe around 20,000 jobs and shut 73 buildings as it seeks to slash costs and reduce its dependence on e-commerce titan Amazon.
The move, revealed during the company’s first-quarter earnings update, is expected to generate savings of up to $3.5bn.
UPS said the cuts are part of a sweeping “network reconfiguration” strategy, which includes consolidating operations and redesigning end-to-end processes to boost efficiency.
A key factor behind the layoffs is the decision to halve its business with Amazon—currently UPS’s largest customer—by the second half of 2026.
The company said the reduced Amazon volume would help improve profitability across its network.
“We expect to reduce our operational workforce by approximately 20,000 positions during 2025 and close 73 leased and owned buildings by the end of June 2025,” UPS said in a statement.
Carol Tomé, chief executive added: “The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier.
“The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”
In its latest financial results, UPS reported a 0.7% year-on-year drop in revenue to $21.5bn, largely due to the sale of freight brokerage firm Coyote Logistics.
Despite this, operating profit rose by 3.3% to $1.7bn, while net income climbed 6.6% to $1.2bn.
Domestic deliveries in the US generated $14.5bn in revenue, a 1.4% increase year-on-year, with operating profits soaring 17.5% to $979m. Meanwhile, international operations posted a 2.7% rise in revenue to $4.4bn, though profits dipped slightly to $641m.
The company’s supply chain division saw the biggest hit, with revenue falling nearly 15% to $2.7bn and operating profits plunging more than 60% to $46m, mainly due to the Coyote divestiture.
The job reductions represent a significant shift for UPS as it reshapes its business model in the face of changing market dynamics and rising pressure to improve margins.
