UPS, the global shipping heavyweight, is preparing to lay off 20,000 workers in 2025 as it wrestles with rising economic pressures and a rapidly shifting business environment. The announcement, which came during its latest earnings call, reflects a company looking to stay lean and competitive amid declining shipments from Amazon and renewed strain from international tariffs.
UPS says the move is part of a broader effort to cut $3.5 billion in costs, streamline operations, and adapt to new market realities. But the scale of the cuts and the ripple effects they may have on workers, unions, and the broader economy is already sparking serious questions.
Why UPS Is Downsizing Now
UPS reported $21.5 billion in revenue for the quarter a slight drop from last year’s $21.7 billion, but enough to raise alarm bells. CEO Carol Tomé described the layoffs as a “necessary response to a macro-economic environment filled with uncertainty,” saying the company needs to become “faster, leaner, and more focused.”
Behind that corporate language lies a more complex truth: UPS is preparing for life with less Amazon. Once a booming partnership, Amazon made up roughly 12% of UPS’s total revenue in 2024. But as Amazon continues building out its own delivery network, UPS is seeing fewer of those familiar brown boxes on its trucks.
That trend, UPS admits, is only expected to continue. And so, the company is rethinking its footprint and its workforce.
Tariffs Make a Comeback and So Does Their Impact
Another factor driving the cuts? Trade policy.
UPS specifically cited “changes in global trade policy and new or increased tariffs” as a reason for the layoffs — a nod to the Trump-era tariffs that are once again shaping global commerce. As the U.S. ramps up economic pressure on China, many businesses are pulling back on cross-border shipping, which directly hits logistics companies like UPS.
Higher tariffs mean higher costs for importing goods, especially from Asia. For UPS, that means fewer international packages and thinner margins on global shipments a tough blow for a company deeply tied to global supply chains.
This isn’t just a line item on a spreadsheet it’s 20,000 people. That includes warehouse workers, package handlers, and delivery drivers. Many of these employees belong to the Teamsters, the powerful union representing about 330,000 of UPS’s 490,000 workers.
And this isn’t the first round of cuts. Back in 2024, UPS let go of 12,000 employees, largely in management roles. Now, the company says it’s going further, targeting frontline operations and closing 73 facilities by mid-2025 to consolidate its footprint.
The impact will be widespread and very personal for many families.
Union Pushback: “UPS Will Be in for a Fight”
The Teamsters are not taking this quietly. Union President Sean O’Brien issued a fiery statement, warning UPS against violating its labor contract, which promises the creation of 30,000 Teamster jobs.
“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way,” O’Brien said. “But if the company intends to violate our contract or go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.”
The threat of labor unrest looms, especially if the cuts fall disproportionately on union-protected workers. After all, the last time UPS and the Teamsters clashed in 2023, the negotiations nearly triggered a nationwide strike.
What’s Next for UPS and the Industry?
Alongside the layoffs, UPS plans to roll out an “end-to-end process redesign” to make its operations more efficient. In other words, fewer buildings, fewer workers, and more automation.
For UPS, it’s a move to future-proof the business in a world where Amazon is a competitor, not just a customer — and where tariffs and trade wars can shape entire shipping strategies overnight.
But the company’s bold pivot also raises a bigger question: Can UPS shrink its way into the future, or will these cuts come at too high a cost both financially and socially?
