UPS Plans to Layoff 20,000 Employees

UPS announced on April 29 that it would eliminate 20,000 positions this year, or around 4% of its global workforce. However, UPS clarified that the decision has nothing to do with tariffs and is instead the result of a previously declared goal to reduce its Amazon business and increase technology use.

By mid-2026, UPS plans to halve its business with its biggest client, Amazon, as part of a "glide down" strategy revealed in January. The majority of the Amazon business that UPS is giving up is "not profitable for us, nor a healthy fit for our network," according to a statement made by UPS CEO Carol Tomé.

In the most recent quarter, UPS's package volume from Amazon had already decreased by 16%, which was more than UPS had anticipated. As the latest step in that "glide down" strategy, UPS said that it will close 73 US buildings by the end of June.

Infusing More Tech into the Operations

Additionally, UPS stated that it anticipates increasing automation across its 400 facilities, from package sorting to label application to truck loading and unloading. "We will also reduce our reliance on labour with this reconfiguration," Tomé stated.

Over 300,000 UPS hourly workers are represented by the Teamsters union, which declared it will oppose any layoffs of its members. Sean O'Brien, the president of the union, stated that the Teamsters will not obstruct UPS's plans to continue reducing corporate management.

 "But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight," said O'Brien.

Glenn Zaccara, a UPS spokesman, responded by saying the business plans to fulfil all of the conditions of the contract. However, Trump's sweeping 10% tariffs on most imports, particularly the 145% taxes on Chinese imports, did have some impact on UPS.

However, the business is still unsure of the long-term consequences.

Uncertainty and Confusion Heating the Environement

According to Tome, clients who frequently transact with China are "not thinking about exiting the business". However, she added that many of them are unsure about exactly what they would do next. Many people are still holding out hope for a rollback of tariffs.

"To be honest, there is a lot of uncertainty regarding the China orders," she stated. "We are aware of the announcements. Actually, we have no idea if it will occur or if it will persist. We believe we don't know a lot of stuff."

UPS predicts that its own revenue will decline in the second quarter compared to a year ago because it believes that its customers will be impacted by the tariffs and Amazon's pullback. However, it stated that it is not yet prepared to release its own full-year guidance, though it did caution that it may do so in the future.

She claimed that because all of those tariffs will eventually affect US consumers, there is a great deal of uncertainty in the second half of the year. Consumer mood is currently lower than it was at the start of the year. However, the customer is still in good health.