UPS set to lay off 20,000 workers as it reduces business with Amazon

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UPS said Tuesday that it expects to cut 20,000 jobs this year and close 73 buildings in the next two months, as the company reduces its business with Amazon and faces wider economic uncertainty.

The shipping giant said in its first quarter earnings news release that the moves were expected to save $3.5 billion this year, and were being conducted “in connection with our anticipation of lower volumes from our largest customer,” which is Amazon.

In January, UPS announced its plan to reduce the volume of Amazon shipments by more than 50 percent by the second half of 2026, in a move UPS said would “put us further down the path to becoming a more profitable, agile and differentiated UPS.”

Amazon founder Jeff Bezos owns The Washington Post.

When UPS announced the planned reduction, Amazon spokesperson Kelly Nantel said in a statement that, “Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision.” Amazon told reporters at the time that they had offered to increase shipping volumes with UPS.

UPS will continue to monitor changes in the volume of shipments and may identify more buildings for closure, it said. First quarter consolidated revenue was down 0.7 percent and consolidated operating profit was up 3.3 percent, compared to the same period last year.

“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” UPS chief executive Carol Tomé said in a statement. “The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”

Sean M. O’Brien, president of Teamsters, the union representing a large proportion of UPS workers, said in a statement that UPS is obligated to created 30,000 Teamsters jobs under their current contract.

“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” he said. “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,” he said.

UPS did not immediately respond to a request for comment, but told Reuters it would follow its contract.

UPS describes itself as the world’s largest package delivery company and employs about 490,000 workers. In its earnings report, UPS described the change as part of efforts to enhance efficiency through automation and consolidation.

The sweeping layoffs also come amid growing evidence suggesting President Donald Trump’s unprecedented tariffs have stymied economic activity and that prices may soon rise, The Washington Post has reported.

Speaking on UPS’s earnings call this week, Tomé noted that many of UPS’s small- and medium- sized business customers source from China and that the Trump administration’s 145 percent tariff on Chinese goods, set to start May 2, is “causing so much uncertainty in the marketplace.”

“The world hasn’t been faced with such enormous potential impacts to trade in more than one hundred years,” Tomé said. “So the only thing we’re certain of is we don’t know which, if any of our scenarios will play out.”