UPS to lay off 20,000 employees amid Amazon shipping rollback

UPS is laying off 20,000 employees as it continues cost-cutting efforts tied to a steep reduction in delivery volume from Amazon, its largest customer.

The shipping giant previously reached an “agreement with Amazon to reduce their volume in our network by more than 50% by June of 2026,” CEO Carol Tomé noted on the company’s Q1 earnings call on Tuesday. More specifically, UPS is rolling back its Amazon “fulfillment center outbound volume,” which “is not profitable for us, nor a healthy fit for our network.”

That pullback plan is running ahead of schedule, and now, the layoffs align with the plan to lessen UPS’s “dependency on labor.”

Beyond the internal restructuring, UPS also stands to be impacted by businesses trimming import orders as fears about rising costs from President Donald Trump’s tariffs breed uncertainty.

“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” 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.”

The company will also close 73 leased and owned buildings by the end of this June, and “may identify additional buildings for closure.” Combined with the job cuts, UPS expects these efforts to amount to $3.5 billion in cost savings.

Revenue for Q1 dipped to $21.5 billion, a 0.7% slip from last year. For domestic packages, revenue climbed 1.4% to $14.46 billion, “driven by increases in air cargo and a 4.5% improvement in revenue per piece, which partially offset a decline in volume,” the company said.

UPS also added its name to a not exactly desirable list: the growing number of companies withdrawing or declining to update full-year outlooks. It passed on offering updates to its previous outlook “given the current macroeconomic uncertainty.”

UPS…it’s just like us.