UPS said it will lay off 20,000 jobs and close more than 70 buildings this year as the logistics group seeks to reduce costs and cut packaging volumes for its largest client, Amazon.
The layoffs will target workers responsible for delivering packages to customers and supporting UPS’s transportation and logistics services, and will mainly be management positions after the team laid off about 14,000 jobs last year.
The latest reduction in number is part of UPS’s plan to increase efficiency and consolidate its domestic networking plan, after it said in January that it had in principle a deal with its “biggest customers” to reduce its number in the second half of 2026.
Amazon accounts for 12% of UPS $91 billion in revenue in 2024, mainly the group’s domestic packaging division of the U.S., according to the delivery company’s 10-K filing. Now, it has its own parcel volume comparable to those from UPS and FedEx.
"Amazon is our biggest customer, but it is not our most profitable customer. Its profit margins are very diluted to the domestic U.S. business," UPS CEO Carol Tomé told analysts in January when explaining his decision to reduce its business with e-commerce groups in January.
UPS said Tuesday it is expected to close 73 rental and own buildings in 2025 to align its network with Amazon’s decline in business. It previously indicated that it also needed to reduce aircraft and fleets.
Management said the actions “can’t be timely” as the company provided tariffs to the Trump administration’s tariffs on U.S. trading partners. UPS refused to update its outlook for the year due to “uncertainty” in the macro economy.
Tomé said UPS ships have about 400,000 packages per day, accounting for about 2% of its global average daily volume.
She said the U.S.-China Trade Bureau accounts for 11% of the $18 billion generated by UPS in 2024. Other trade lanes transporting to the United States account for about 18% of the sector's revenue, while the rest are entirely overseas.
According to the group's latest filing, the Atlanta-based company has approximately 490,000 employees worldwide, with nearly 83% of them in the U.S.
UPS said the plan is expected to save $3.5 billion in costs from the plan and expects $400 million to $600 million in fees this year to be associated with early-stage asset retirement, lease-related costs and employee separation benefits.
In the first three months of 2025, UPS reported net income of $1.2 billion, with its revenue falling to $21.5 billion.
UPS shares fell 0.4% on Tuesday.