The UPS layoffs Amazon, relationship have come under sharp focus as UPS announced plans to cut 20,000 jobs in 2025, representing over 4% of its 490,000 global employees. This large-scale reduction is part of a wider restructuring and cost-saving strategy, which also includes shutting down 73 facilities by June 2025. The company attributes these actions directly to a significant reduction in package volumes from Amazon, its largest customer.
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In a recent earnings call, UPS CFO Brian Dykes explained that the layoffs and facility consolidations are designed to enhance the company’s U.S. domestic operating margin and overall profitability. The shipping giant expects to save $3.5 billion through these measures, despite reporting a healthy $21.5 billion in revenue for the past quarter.
UPS disclosed in a regulatory filing that the layoffs are connected to “anticipated lower volumes” from Amazon. This follows a mutual agreement between the two companies reached in January 2025 to reduce deliveries from Amazon by more than 50% in the second half of 2026. Interestingly, Amazon claims it had offered to increase parcel volumes through UPS, but the courier declined, choosing instead to focus on “revenue quality.”
Though the UPS layoffs Amazon decision has strained parts of the logistics ecosystem, UPS insists the two companies still maintain a “strong working relationship.” Amazon, for its part, said it respects UPS’s operational needs and confirmed that partnerships with multiple carriers will continue to ensure customer deliveries.
Union concerns have also intensified. Sean M. O’Brien, president of the Teamsters Union, warned UPS not to violate its National Master Agreement, which requires the company to create 30,000 Teamsters jobs. O’Brien said the union supports cuts to corporate roles but will “fight back” if union jobs are threatened.
Trade issues compound UPS’s challenges. The company handles 400,000 import parcels daily, with U.S.-China shipments accounting for 11% of international revenue—its most profitable trade route. UPS is concerned about rising tariffs and trade tensions, which could affect delivery volumes and revenue.
At the same time, Amazon is facing political criticism after reports suggested it might display tariffs on its online platform. The company denied these reports, stating such a feature was never approved.
Conclusion: The UPS layoffs Amazon decision highlights a deliberate shift in UPS’s strategy—cutting costs, limiting Amazon dependency, and preparing for trade volatility—all while navigating complex labor and political landscapes.
