UPS unveils $3.5 billion cost-saving plan with 20,000 job cuts, 73 facility closures
Global shipping giant UPS is set to cut 20,000 jobs and shut down 73 facilities by the end of June 2025 in a sweeping effort to reduce costs and streamline operations. The move, disclosed in its Q1 2025 earnings report, is expected to save the company $3.5 billion over the course of the year.
The job cuts will affect approximately 4% of UPS’s global workforce of 490,000 employees. The company also expects to incur between $400 million and $600 million in associated expenses this year as part of the restructuring plan.
CEO Carol Tomé described the layoffs and closures as a strategic response to evolving market dynamics. “The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” she said in the earnings report. Tomé added that the restructuring would make UPS "even stronger" and "more nimble" amid economic challenges and shifting customer demands.
A major factor driving the downsizing is UPS’s decision to reduce its business with Amazon. In January, the company revealed it would scale back its reliance on the e-commerce giant, which accounted for roughly 12%—or $1.07 billion—of UPS’s total revenue in 2024. By June 2026, UPS plans to cut more than half of its Amazon business, prompting a significant loss in revenue that the company aims to offset through operational cutbacks.
UPS is also facing headwinds from changes in international shipping trends. According to Reuters, a recent tariff of up to 145% imposed by the United States on Chinese goods has led to reduced shipping volumes from Chinese-based sellers like Shein and Temu, both of which have responded by raising prices significantly. These changes have added pressure on UPS to adapt its business model.
This is not the first wave of layoffs at UPS in recent times. In January 2024, the company eliminated 12,000 jobs and implemented a mandatory five-day office return policy for corporate employees. The latest round of reductions, however, represents a more dramatic reshaping of UPS’s global footprint.
Despite the significant workforce and infrastructure reductions, UPS’s Q1 earnings offered some positive signals. The company reported $21.5 billion in revenue, a 0.7% drop compared to the same quarter last year but still surpassing Wall Street expectations of $21 billion. In the U.S. market, revenue grew by 1.4% to $14.46 billion, largely driven by gains in air cargo which helped cushion the decline in ground shipping volumes.
As of April 2025, UPS maintains a market capitalisation of over $82 billion and continues to deliver approximately 22.4 million packages daily.
With this aggressive cost-cutting strategy, UPS is signalling a clear intent to prioritise profitability and adaptability in a logistics industry facing mounting geopolitical, economic, and technological pressures.