UPS Cuts Amazon Shipments

UPS Slashes Workforce as Amazon Volume Drops

In a major restructuring move, UPS cuts Amazon shipments and is eliminating 20,000 jobs—over 4% of its workforce. The delivery giant said the decision stems from a strategic plan to increase profitability by scaling back on lower-margin deliveries, especially from Amazon, its largest customer.

This follows a similar move last year when UPS let go of 12,000 employees. With approximately 490,000 workers globally, the company now aims to consolidate operations by shutting down 73 facilities by June 2025.

“These actions will enable us to expand our U.S. Domestic operating margin and increase profitability,” said CFO Brian Dykes during Tuesday’s earnings call.

Behind the Cuts: Amazon Deal Scaled Back

In January, UPS reached an agreement with Amazon to reduce its package volume by over 50% starting in the second half of 2026. While Amazon reportedly offered to increase its shipping volume, UPS declined in favor of boosting revenue per parcel.

“Due to their operational needs, UPS requested a reduction in volume, and we respect their decision,” said Amazon spokesperson Kelly Nantel.

Despite the reduced volume, Amazon says it continues to have a “strong working relationship” with UPS, suggesting this may be more of a recalibration than a complete severance.

Teamsters Union Reacts: Battle Brewing?

Sean M. O’Brien, president of the Teamsters union, reminded UPS of its contractual obligation to create 30,000 Teamster jobs as per their national master agreement.

“If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way. But if it violates our contract, there will be consequences,” he warned.

This tension highlights the potential for labor disputes in the coming months, especially if frontline positions are affected.

Economic Factors and Tariff Tensions Add Pressure

UPS’s announcement also touched on broader economic risks, particularly in global trade. The company expressed concern over shifting U.S.–China trade policies and noted that revenue from China-to-U.S. shipping routes accounts for 11% of its international income. | UPS and Amazon

“Our China to U.S. trade lines are our most profitable,” said CEO Carol Tomé.

With the Trump administration imposing new tariffs, UPS could face more volatility in international shipping volume and costs.

Meanwhile, Amazon has been pulled into the tariff discussion as well. Reports suggested Amazon might display import charges alongside product prices—a claim the company has since denied. | UPS job reduction

Looking Ahead: Profit Over Volume

UPS’s plan to reduce costs and boost operating margin aligns with a growing corporate trend—prioritizing profit over sheer scale. The company expects to save $3.5 billion in 2025 through consolidation, layoffs, and operational efficiency. | Amazon delivery cuts

While it delivers 22.4 million packages daily on average, UPS appears determined to scale smartly rather than broadly. | UPS cuts Amazon Shipments

For now, the job cuts serve as a warning bell across the logistics industry—even global giants like UPS are shifting gears to stay competitive in an evolving delivery landscape. UPS Official Website, Amazon Press Room, Teamsters, CBS News

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