In a big announcement on Tuesday, April 30, 2025, UPS said it plans to cut 20,000 jobs this year. That’s about 4% of its global workforce. The company says this decision is not because of tariffs. Instead, it’s about automation, efficiency, and a major plan to cut ties with Amazon.
Let’s break down what’s going on at UPS, what this means for workers, and how this shift could impact customers and the economy.
Why is UPS cutting so many jobs?
UPS is making big changes to how it operates. The company is now focusing more on automation and is reducing its reliance on big customers like Amazon.
UPS CEO Carol Tomé, who is 67 years old with an estimated net worth of $45 million, explained the reason behind the cuts. She said UPS is “lessening its dependency on labor” by automating many tasks in its facilities.
That includes using machines to sort packages, apply labels, and even load and unload trucks. By the end of this plan, about 400 UPS buildings will be at least partly automated.
What’s going on between UPS and Amazon?
Amazon has been UPS’s largest customer for years. But now, UPS wants to step away.
Earlier this year, in January, UPS announced a “glide down” plan. This plan will reduce UPS’s business with Amazon by half by mid-2026.
Carol Tomé said most of the work UPS was doing for Amazon was not profitable. It didn’t fit well with their network either. That’s a pretty bold move when you’re talking about your biggest client!
Already, UPS package volume from Amazon dropped by 16% last quarter—more than they expected. As part of this shift, UPS is closing 73 U.S. buildings by the end of June 2025.
How is automation changing UPS?
UPS is going all-in on technology and automation.
Instead of relying on people to do manual work, they’re installing systems that can handle sorting, loading, and tracking packages.
This change will affect many employees. But UPS says it’s part of a bigger plan to be faster, more efficient, and reduce long-term costs.
However, not everyone is happy about this shift.
What does the union say about these layoffs?
The Teamsters union, which represents more than 300,000 UPS hourly workers, is not staying silent.
Sean O’Brien, the union president, made it very clear. He said if UPS wants to cut corporate jobs, that’s fine. But if the company tries to touch union jobs, it’s “in for a hell of a fight.”
UPS responded by saying it will honor the terms of the union contract. But the tension is very real, and many workers are worried about what’s next.
Are tariffs also affecting UPS?
Interestingly, tariffs on Chinese imports are causing uncertainty too.
While UPS says the layoffs are not because of tariffs, it admits that many of its customers who rely on China are unsure about their next steps.
Some are hoping tariffs will be rolled back. Others are waiting to see what happens. UPS expects that U.S. consumers will eventually feel the impact, especially if these tariffs stick around.
What does this mean for UPS customers?
UPS expects its revenue to go down in the next quarter. That’s due to both the Amazon pull-back and the impact of trade policies.
Still, the company is not lowering its full-year forecast just yet. But they might change it later this year depending on how things go.
Tomé added that while consumer spending is still strong, people are more cautious now than they were earlier in the year.
FAQs
1. How many jobs is UPS cutting in 2025?
UPS is cutting 20,000 jobs globally this year due to automation and restructuring.
2. Why is UPS ending some work with Amazon?
UPS says the Amazon business was not profitable or a good network fit.
3. Will union workers be laid off too?
The Teamsters union is fighting to protect those jobs and enforce their contract.
4. Is automation the main reason for job cuts?
Yes, UPS is using more technology to reduce labor and increase efficiency.
5. Are tariffs affecting UPS operations?
Yes, but indirectly. Customers trading with China are facing uncertainty due to high import tariffs.
