UPS announced that it plans to reduce its workforce by about 20,000 employees and close 73 facilities, the company said when announcing its financial statement for the first quarter of 2025.
The reduction of 20,000 employees represents 4% of the company's workforce.
The workforce reduction comes amid a period of uncertainty for UPS. The company did not provide an update to its 2025 projections when releasing its quarterly earnings.
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“I want to thank all UPSers for their hard work and efforts in this very dynamic environment,” said Carol Tomé, UPS CEO. “As a trusted leader in global logistics, we will leverage our integrated network and trade expertise to assist our customers as they adapt to a changing trade environment. Further, the actions we are taking to reconfigure our network and reduce costs across our business could not be timelier. The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS.”
The changes are set to take effect by June 2025.
Earlier this year, UPS announced that it would reduce its volume of Amazon shipments by over 50% by mid-2026. Tomé stated that Amazon is UPS' largest partner. In January, Tomé noted that Amazon represented 11.8% of the company's total revenue.
Brian Dykes, chief financial officer for UPS, said its anticipated Amazon volume reduction would remove $3.5 billion in expenses in 2025.
Tomé noted that reducing its reliance on a single company for so much of its volume should help UPS stabilize its revenue as the U.S. economy enters a period of uncertainty. UPS leaders said in an investor call that it's unclear what, if any, impact tariffs will have on operations.
"By gliding that down, we actually give ourselves financial flexibility to address other scenarios that might come our way. So, while we have a lot to do to make this happen, we're building in flexibility and agility that we've never had before, being so dependent on that one customer for volume and growth," Tomé said.
In addition to the 73 facilities set to close by the end of June, Dykes said there are 50 additional locations that UPS will "continue to look at."
