UPS to lay off 20,000 workers amid Amazon order slump
UPS has announced plans to lay off 20,000 employees due to an expected decline in orders from Amazon, its largest client. Another reason cited is the need to cut costs amid an uncertain economic climate characterized by widespread tariffs, reports Reuters.
Despite reporting better-than-expected profits in the first quarter of 2025, UPS intends to reduce its workforce by 20,000 to mitigate costs from the anticipated drop in Amazon orders, according to Reuters.
On Tuesday, UPS shares rose nearly 2% before the stock market opened, following an announcement detailing $3.5 billion in savings by 2025, attributed to 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 impacted by these layoffs.
Network reorganization and cost reduction
U.S. President Donald Trump implemented widespread tariffs, which have slowed trade and compelled companies to cut costs in anticipation of decreased demand. For package delivery companies like UPS, this slowdown could lessen the need 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.
Due to economic uncertainty, UPS did not update its full-year forecast, even as it cuts costs through layoffs, warehouse closures, increased automation, and asset sales.
Impact on financial results
In the first quarter of 2025, UPS revenues slightly decreased to $21.5 billion but still surpassed Wall Street expectations of $21.05 billion. The domestic segment in the U.S. saw a revenue increase of 1.4% to $14.46 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, exceeding analysts' expectations of $1.38. Earlier this year, the company projected its annual revenue to be $89 billion, with an operating margin of around 10.8%.
