UPS announces it will lay off 20,000 workers throughout the remainder of 2025 as the logistics giant grapples with falling demand, operational restructuring, and a significant decline in package volumes from Amazon—its largest customer. The company also confirms it will shutter 73 distribution centers as part of a sweeping consolidation plan aimed at reducing costs and adapting to shifting e-commerce trends.
The announcement, made from UPS headquarters in Atlanta, comes just a year after the company eliminated 12,000 positions in 2024. These cuts, according to executives, reflect deeper changes in consumer behavior and retail partnerships, particularly the ongoing fallout from UPS’s shrinking contract with Amazon. Once a central pillar of UPS’s growth strategy, Amazon now accounts for a much smaller portion of package volume following the retail giant’s rapid expansion of its own delivery network.
Sources tell CBS News that Amazon has rerouted a large percentage of its shipments to its internal logistics network—Amazon Logistics—reducing its dependency on external carriers like UPS and FedEx. This change has sent ripple effects through the transportation and shipping industries, with UPS being one of the hardest hit.
The company says the layoffs will be implemented in phases through the end of the year and will impact warehouse workers, delivery drivers, and corporate staff. UPS has yet to disclose the geographic breakdown of the layoffs, but union officials warn that the cuts will disproportionately affect workers in major urban and suburban distribution hubs. In addition to the job losses, 73 facilities across the United States and international locations will be closed or consolidated into larger regional centers.
In a statement to investors, UPS CEO Carol Tomé says the company is making “difficult but necessary decisions to safeguard long-term profitability and position UPS for the future.” Tomé emphasizes that while the workforce reduction is painful, it is part of a broader realignment plan designed to make UPS more efficient, technologically advanced, and competitive in a rapidly evolving logistics environment.
Despite efforts to diversify its client base, UPS has continued to rely heavily on Amazon in recent years. That relationship has become strained as Amazon increasingly brings more of its supply chain in-house. Analysts say this latest round of layoffs signals a critical inflection point for UPS, which must now accelerate innovation and deepen its service offerings to smaller retailers and business-to-business customers in order to stabilize revenue.
Industry experts also point to broader economic headwinds that are contributing to the company’s contraction. Rising fuel costs, inflation, and changes in global trade patterns have put pressure on shipping volumes across the board. UPS’s international operations in more than 200 countries are also facing disruptions tied to regulatory shifts and labor market constraints.
Labor unions representing UPS workers, including the International Brotherhood of Teamsters, are already pushing back against the cuts. In a statement, Teamsters President Sean O’Brien accuses UPS of “corporate overreach” and “abandoning the very workers who kept its business alive during the pandemic.” The union is demanding greater transparency in how layoffs are being decided and says it will explore legal and contractual options to challenge the closures.
The news also raises concerns about the health of the logistics sector more broadly. Competitors like FedEx have also announced layoffs and restructuring plans in recent quarters. As e-commerce growth stabilizes post-pandemic and major retailers build proprietary delivery systems, legacy logistics firms are under mounting pressure to adapt or risk deeper declines.
UPS stock dips slightly in early trading following the announcement, as investors weigh the long-term implications of the company’s restructuring. Analysts say the move may bolster short-term margins but caution that UPS must execute its transformation strategy quickly to avoid losing further market share.
As 2025 progresses, UPS is expected to provide further updates on facility closures and the integration of automation and artificial intelligence into its delivery operations—key pillars of its future-facing strategy.
