United Parcel Service (UPS) announced it will cut 20,000 jobs and shut down 73 store locations starting Tuesday. This major UPS layoff marks one of the most significant workforce reductions in recent years, as the company attempts to align operations with declining demand and rising costs. The focus keyword UPS job cuts is front and center in what could become a pivotal moment for the company’s future.
At the heart of the UPS job cuts lies a shrinking partnership with Amazon, one of UPS’s largest clients. Reduced UPS Amazon delivery volumes have played a central role in the company’s recent financial and strategic decisions. As Amazon pulls back on third-party shipping and ramps up its internal logistics, UPS finds itself needing to adapt rapidly to a changing business environment.
Declining Amazon Deliveries Hit Hard
UPS’s CEO, Carol Tomé, confirmed that the decision to restructure was driven largely by reduced profitability from the Amazon contract. Once a major growth driver, UPS Amazon delivery operations are now being scaled back significantly. Under a new agreement, Amazon delivery volumes handled by UPS are expected to drop by over 50% by late 2026.
This decline has directly impacted UPS’s network planning, leading to the closure of 73 stores and facilities across the U.S. The company says the changes will save an estimated $3.5 billion by the end of 2025, though it will incur $400 to $500 million in short-term restructuring costs.
UPS Q1 Earnings Reveal the Bigger Picture
Despite the restructuring news, UPS posted better-than-expected first-quarter results. The UPS Q1 earnings report shows a net income of $1.19 billion with adjusted earnings per share at $1.49. Total revenue for the quarter came in at $21.55 billion, slightly exceeding Wall Street estimates.
However, UPS chose not to revise its full-year forecast, maintaining a cautious outlook amid ongoing economic uncertainty. The company is sticking to its 2025 revenue target of approximately $89 billion while continuing to evaluate broader market conditions.
UPS Stock Reacts to Layoffs and Forecast
Investor reaction to the announcement has been mixed. Following the news of UPS job cuts, UPS stock experienced a slight dip, trading at $96.73 as of Tuesday morning, a year-to-date drop of nearly 23%. Analysts believe the reduced Amazon reliance and focus on cost-saving may stabilize long-term performance, but short-term volatility is expected.
UPS’s pivot aligns with its “better, not bigger” philosophy—an effort to improve margins over raw shipping volume. The company is now prioritizing profitable business segments and reducing exposure to lower-margin services like those previously tied to Amazon.
What’s Ahead for UPS?
The large-scale UPS layoff and strategic realignment signal a significant shift for the shipping giant. While painful in the short term for workers and some communities, the company believes this leaner model positions it for long-term success. As the logistics industry continues to evolve, UPS is betting that focusing on efficiency, automation, and higher-margin deliveries will help it weather the storm and emerge stronger.
