UPS on Tuesday announced it is planning to cut 20,000 jobs this year, part of a cost-cutting effort that’s linked to fewer deliveries from Amazon, its biggest customer.
The shipping company, which operates in over 200 countries, currently has around 490,000 employees. The layoffs will impact slightly over 4% of its workforce.
The move is part of the company’s plan to consolidate UPS’s facilities and workforce. Along with the job cuts, the company announced it will also close 73 of its buildings by the end of June 2025 and said that it may target additional buildings for closure.
“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” Brian Dykes, the chief financial officer of UPS said during an earnings call on Tuesday morning.
In a Tuesday regulatory filing, UPS said the cuts are in “connection with our anticipation of lower volumes from our largest customer.” The company expects to save $3.5 billion this year as a result of its consolidation plan.
The company in January said it had reached an agreement with Amazon to decrease its delivery volume by more than 50% in the second half of 2026.
“The reduction of package volume from Amazon is something UPS chose to do as we focus on revenue quality, and increase domestic operating margin and profitability,” a UPS spokesperson told CBS MoneyWatch in an email.
UPS shares slipped 1.13 cents, or 1.16%, in early trading.
In its quarterly earnings statement, the company also mentioned the risk that shifts in global trade policy could have on business. The Trump administration has introduced sweeping new tariffs in recent months that have already began to impact the flow of goods in and out of the country, and around the world.
UPS is keeping customers abreast of tariff developments on its website. It has also introduced a tool called UPS Global Checkout that shows online shoppers the upfront costs they will have to pay in duties, fees and taxes.
