UPS to cut 20,000 jobs amid Amazon order slowdown
UPS has announced plans to lay off 20,000 employees due to an anticipated decline in orders from Amazon. Another reason cited is the need to reduce costs in an uncertain economic climate, influenced by widespread tariffs, according to reports from Reuters.
During the first quarter of 2025, UPS reported profits that surpassed market expectations. Despite this, the company plans to lay off 20,000 workers to cut costs amid the expected drop in orders from its largest client, Amazon, as reported by Reuters.
UPS shares rose nearly 2% before the stock market opened on Tuesday after the company announced savings of $3.5 (£2.6) billion by 2025, achieved through staff reductions and the closure of 73 rented and owned buildings by the end of June.
However, the company has not specified which countries will be affected by the mass redundancies.
Network reorganisation and cost reduction
US President Donald Trump introduced widespread tariffs that slowed trade and forced companies to reduce costs in anticipation of a decline in demand. For package delivery companies like UPS, this slowdown may decrease the demand for transportation services between businesses.
The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier, said UPS CEO, Carol Tome.
UPS did not provide any updates regarding forecasts for the entire year due to economic uncertainty. Even as it reduces costs by means of layoffs, warehouse closures, increased automation, and asset sales, the uncertainty persists.
Impact on financial results
In the first quarter of 2025, UPS revenues slightly decreased to $21.5 (£16) billion but still surpassed Wall Street expectations of $21.05 (£15.7) billion. The domestic segment in the U.S. saw a revenue increase of 1.4% to $14.46 (£10.8) billion, driven by an uptick in air shipments and improved revenue per package, despite a decline in volume.
UPS reported an adjusted earnings per share of $1.49 (£1.1), exceeding analysts' expectations of $1.38 (£1). Earlier this year, the company projected its annual revenue to be $89 (£66.35) billion, with an operating margin of around 10.8%.
