UPS To Cut 20,000 Jobs, Close Facilities As Amazon Shipments Drop Amid Trump Tariffs

United Parcel Service Inc. (NYSE:UPS) has disclosed its intentions to lay off 20,000 employees and cease operations in 73 facilities. This decision is attributed to a considerable decline in deliveries for Amazon.com Inc. (NASDAQ:AMZN), its primary client, and the ongoing repercussions of President Donald Trump‘s tariffs.

What Happened:  UPS is planning to cut 20,000 jobs and shut down 73 facilities. This move is a consequence of a planned reduction in deliveries for Amazon and the continued impact of President Trump’s tariffs. The job cuts are part of an extensive operational restructuring aimed at cost-cutting and enhancing efficiency. An Amazon spokesperson stated, “Due to their operational needs, UPS requested a reduction in volume and we certainly respect their decision,” reported Reuters.

Sean O’Brien, general president of the Teamsters, said that UPS is contractually obligated to create 30,000 jobs as part of its current national master agreement. He warned that any violation of this agreement or attempts to compromise the hard-earned jobs of Teamsters would result in a severe backlash.

In response, UPS assured its commitment to the contract. The company currently has 406,000 employees in the U.S., with more than 75% represented by unions.

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Why It Matters: The announcement of job cuts and facility closures comes on the heels of UPS’s Q1 2025 results, which were a mixed bag. The company reported a consolidated revenue decline of 0.7% year-over-year to $21.546 billion, beating the consensus of $21.05 billion.

The adjusted EPS was $1.49, up 4.3% YoY, above the consensus of $1.38. Despite the better-than-expected results, the company is evidently grappling with the impact of reduced Amazon deliveries and tariffs, leading to this significant operational restructuring.

Earlier this month, President Trump imposed new 145% tariffs on many Chinese goods, escalating trade tensions. While U.S. imports make up less than 2% of UPS's global volume, the China-U.S. route remains highly profitable, accounting for 11% of UPS's international revenue. UPS is seeing increased volume from Europe and Asia, but small businesses reliant on China could be hit hard. UPS also faces risks from Chinese e-commerce giants as the duty-free status ends in May. "In the worst case," a supply shock could follow stated Brian Dykes, EVP and CFO at UPS.

UPS holds a Growth rating of 38.42% and a value rating of 57.32%, according to Benzinga’s Proprietary Edge Rankings. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

The stock plunged more than 12% over the past month. On Tuesday, it closed 0.37% lower, as per Benzinga Pro

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.