- By Shivangi Sharma
- Wed, 30 Apr 2025 11:11 PM (IST)
- Source:JND
United Parcel Service (UPS) announced a major restructuring move on Tuesday that will result in the elimination of approximately 20,000 jobs and the closure of 73 facilities across its network. This decision comes amid a steep decline in parcel volume from Amazon, once UPS’s biggest client, and increasing pressure from global trade tensions.
The layoffs, which represent just over 4 per cent of UPS's 490,000-strong global workforce, mark one of the largest workforce reductions in the company’s history. The closures and layoffs are part of UPS’s broader cost-cutting strategy to adjust to a shifting logistics landscape.
Amazon Shipping Volume To Drop Over 50%
Amazon, which accounted for 11.8 per cent of UPS’s revenue in 2024, is expected to reduce its shipping volume with the company by more than 50 per cent by mid-2026. This follows a rare agreement reached in January that will significantly scale back Amazon’s reliance on UPS’s logistics services.
This change marks a dramatic shift in UPS’s business model, which had relied heavily on Amazon’s growing e-commerce footprint. The decision to restructure is driven by the need to rebalance the company’s network and adapt to evolving customer dynamics.
CEO: Restructuring Is “Timely And Necessary”
UPS CEO Carol Tomé justified the move, citing market uncertainty and the need for agility. “The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” Tomé stated. “The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”
The company had previously cut 12,000 jobs in January 2024 after reporting a significant drop in earnings. Now, it is doubling down on restructuring in a bid to regain profitability and operational efficiency.
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Trade Tensions Add To Financial Strain
In addition to the decline in Amazon deliveries, UPS’s decision is also influenced by the ongoing trade war between the US and China. Tomé highlighted that revenue from China-to-US shipping lanes represented 11 per cent of UPS’s total international revenue last year and described them as the company’s “most profitable trade lines.” With tariffs and trade barriers increasing, UPS is taking proactive steps to reduce costs and remain competitive amid global economic uncertainty.