A UPS driver turns back at the end of Lieutenants Island Road in Wellfleet after seeing a FedEx delivery truck which got stuck in the high tide flooding in from Cape Cod Bay at mid-day. Photo on March 01, 2025.
Atlanta, Georgia – UPS announced Tuesday that it will cut 20,000 jobs and shut down 73 facilities in 2025. The shipping giant is undergoing a sweeping overhaul of its U.S. network in a bid to save $3.5 billion. The company cited soft demand and a turbulent global trade environment—largely shaped by President Donald Trump’s renewed tariffs—as key reasons for the restructuring.
“This is about becoming a stronger, more nimble UPS,” CEO Carol Tomé said in a statement. “The world has not been faced with such enormous potential impacts to trade in more than 100 years.”
The announcement came alongside UPS’s first-quarter 2025 earnings report. Revenue dipped slightly to $21.5 billion, down 0.7% year-over-year, while adjusted operating profit inched up 0.9% to $1.7 billion. The company also pulled its full-year financial forecast, citing macroeconomic uncertainty from the new tariffs.
UPS’s supply chain business took the biggest hit last quarter, with revenue plunging nearly 15%, largely due to the divestiture of its freight brokerage, Coyote Logistics. The company also acknowledged a significant drop in shipments from Amazon — its largest customer — and a steep downturn from Chinese e-commerce sellers like Temu and Shein, which are now facing new tariff thresholds starting May 2.
Atlanta-based UPS had previously announced plans to reduce deliveries for Amazon by 50% by mid-2026, citing profitability concerns. “This was not their ask. This was us taking control of our destiny,” Tomé told investors in January.
The company said it has already saved $80 million this year through early phases of its restructuring, though it has also incurred $23 million in related costs. UPS expects to spend between $400 million and $600 million on separation benefits and lease terminations throughout 2025.
The job cuts, facility closures, and broader cost-cutting efforts make UPS the first major U.S. company to initiate mass layoffs in direct response to the evolving trade landscape. Analysts warn that the decision to withdraw its financial guidance could further rattle investors amid an already volatile economic outlook.
“The removal of 2025 guidance will likely create a wide range of outcomes that may be difficult to underwrite without greater macro clarity,” said Evercore ISI analyst Jonathan Chappell.
UPS’s domestic segment did post some gains, with revenue up 1.4% to $14.46 billion, driven by stronger air cargo and improved revenue per package, even as total shipment volumes declined.
As trade uncertainty deepens and global demand weakens, UPS’s dramatic restructuring could be the first in a wave of logistics industry recalibrations.
