United Parcel Service (UPS) has unveiled a major restructuring strategy set for 2025, which will see the company lay off around 20,000 employees and close 73 of its facilities by the end of June. The move is aimed at streamlining operations, cutting costs, and improving efficiency amid rising economic pressures and strategic shifts in the logistics industry.
Why UPS Is Making These Changes
Fewer Amazon Shipments
One of the biggest shifts is UPS’s plan to scale back the number of packages it ships for Amazon—by more than 50% by mid-2026. Although Amazon is still UPS’s largest client, the relationship has become less profitable. As a result, UPS is refocusing on customers and sectors that bring in better margins.
Impact of U.S. Tariffs
UPS is also feeling the strain from new U.S. tariffs, especially on goods coming from China. These tariffs have disrupted trade routes and raised shipping costs, leading to lower demand from major online retailers like Shein and Temu. This drop in shipment volume has affected UPS’s bottom line and contributed to the restructuring decision.
Financial Effects of the Restructure
Big Savings, Big Costs
While the plan is expected to help UPS save around $3.5 billion over the next year, it won’t come cheap in the short term. The company anticipates spending between $400 million and $600 million on severance packages and lease terminations related to the closures and layoffs.
Strong Q1 Earnings
Despite these challenges, UPS reported strong financial results for the first quarter of 2025. The company posted a net income of $1.19 billion, with earnings per share at $1.49 and total revenue of $21.55 billion—beating Wall Street’s expectations.
More About the Closures and Layoffs
Shutting Down Facilities
The 73 facilities set to close are part of UPS’s “Network of the Future” plan, which aims to make its supply chain faster, leaner, and more responsive to market demands. Additional closures may follow later in the year.
4% of Global Workforce Affected
The job cuts represent about 4% of UPS’s global workforce, which currently includes roughly 490,000 employees. The company has not yet specified which regions or departments will be most affected.
Stock Snapshot
As of April 29, UPS shares were trading at $96.73, down $0.41 (0.42%) for the day. After-hours trading saw a further dip of $0.23, bringing the price to $96.50.
