UPS to cut 20,000 jobs as it slashes Amazon deliveries

United Parcel Service (UPS) will slash 20,000 jobs and shut down 73 facilities by June on lower parcel volumes from Amazon and overall economic challenges, the company said on Tuesday.

With the cuts, UPS plans to streamline operations and reduce costs as it anticipates further pressure on its delivery business.

Amazon, which is UPS’s largest customer, contributed nearly 12% of its revenue last year.

In January, the company announced plans to scale back its lower-margin deliveries for Amazon by more than 50% over the next 18 months, Bloomberg reported.

UPS laid off 12,000 employees earlier this year, and the latest layoffs are expected to generate $3.5 billion in savings through workforce downsizing, facility closures, automation, and asset sales.

“Cost-cutting measures are appropriate in light of the present macroeconomic difficulties,” UPS chief executive officer (CEO) Carol Tomé said in a statement to Reuters.

She attributed shifting trade policies to the contributing factors that have increased volatility in global supply chains.

The company is also expecting the impact of new US tariffs that take effect on 2 May.

The tariffs target e-commerce imports from low-cost Chinese retailers such as Temu and Shein, which is likely to further reduce parcel volumes.

Despite the cost-cutting and uncertain economic landscape, UPS reported first-quarter results that surpassed analyst expectations.

Revenue for the quarter declined slightly to $21.5 billion.

Adjusted earnings per share reached $1.49, beating the forecast of $1.38.

Domestic US revenue rose 1.4% to $14.46 billion, driven by improved air cargo performance and higher revenue per package, even as overall volumes dropped.

The company expects to incur between $400 million and $600 million this year because of separation benefits and lease-related expenses associated with the facility closures and workforce reduction.