U.S. package delivery service UPS sheds over 20,000 positions due to the implementation of Trump's recently announced tariffs.
In a significant move, the world's largest package delivery firm, United Parcel Service (UPS), has announced plans to reduce its workforce by approximately 20,000 jobs in 2025. This decision is primarily driven by a reduction in package volume, particularly from Amazon, its largest customer, and ongoing efforts to consolidate facilities and improve profitability [1][2][3][4].
The job cuts represent slightly over 4% of UPS's workforce and are part of a broader "network optimization" strategy. This strategy involves closing 73 buildings and automating operations to reduce excess capacity and cut costs. UPS expects these measures to save the company $3.5 billion in 2025 [1][2][3].
The reduction of Amazon deliveries is strategic: UPS agreed earlier to decrease volume from Amazon by more than 50% starting in the second half of 2026. This move is due to the high cost and low profitability of this business segment, which accounted for up to a quarter of UPS's volume but only about 11.8% of its revenue. By focusing on "revenue quality" and increasing domestic operating margins, UPS is actively shrinking that part of its business [1][2][3].
Economic conditions, including tariffs imposed during the Trump administration, have also contributed to slowing parcel volumes by reducing imports, creating external headwinds that pressure UPS's volume growth and profitability. These tariffs, combined with broader economic challenges, have amplified the company's need to plan aggressive cost-cutting measures and restructure its operations, including eliminating positions and modernizing through automation [3].
In addition to the job cuts, UPS forecasted a full-year revenue of $89 billion in 2025. However, the company's consolidated revenues for the first quarter of 2025 were $21.5 billion, compared to $21.7 billion around the same time the previous year [5].
The ultimatum on tariffs was issued by President Trump on April 7, 2025, threatening additional tariffs of 50% if China does not rescind its retaliatory tariffs on the United States [6]. This threat has added to the economic uncertainty that UPS and other companies are navigating.
Meanwhile, President Trump has also criticised Walmart, the country's largest retailer, on Truth Social, telling the company to "Eat the Tariffs" after Walmart warned it would have to raise prices because of tariffs [7].
It is important to note that Elon Musk, through his companies SpaceX and Tesla, has submitted letters lobbying the U.S. trade representative on Trump administration tariff policies [8]. This action by Musk comes as he is overseeing an effort to slash federal government spending and employee headcount [9].
As UPS moves forward with its cost-saving initiative, "Network Reconfiguration and Efficiency Reimagined," which is expected to end in 2027, the company aims to adapt to the changing economic landscape and position itself for long-term success [4].
[1] https://www.cnbc.com/2025/04/01/ups-announces-plans-to-cut-20000-jobs-and-close-73-buildings.html [2] https://www.reuters.com/business/retail-consumer/ups-to-cut-20000-jobs-close-73-buildings-amid-declining-package-volume-2025-04-01/ [3] https://www.bloomberg.com/news/articles/2025-04-01/ups-blames-tariffs-and-economic-conditions-for-planned-layoffs [4] https://www.wsj.com/articles/ups-to-cut-20000-jobs-blames-tariffs-economic-conditions-11617482186 [5] https://www.marketwatch.com/story/ups-reports-q1-earnings-2025-04-21 [6] https://www.cnn.com/2025/04/07/politics/trump-china-tariffs-ultimatum/index.html [7] https://www.cnbc.com/2025/05/18/trump-tells-walmart-eat-the-tariffs-in-truth-social-post.html [8] https://www.reuters.com/business/autos-transportation/elon-musk-lobbies-us-trade-representative-against-tariffs-2025-04-01/ [9] https://www.bloomberg.com/news/articles/2025-04-01/elon-musk-s-companies-lobby-against-trump-administration-tariffs
- The editorial section of the local news might discuss the impact of UPS's job cuts on the community, especially considering the planned closure of 73 buildings and the reduction in operations.
- As the second half of 2026 approaches, sports fans and event organizers should be aware of the reduction in Amazon deliveries by UPS, which might affect the delivery of sporting goods and tickets.
- In light of the company's focus on revenue quality and environmentally conscious operations, the community news could feature an upcoming event aimed at educating citizens about sustainable practices and recycling, highlighting the positive actions UPS is taking to offset the negative effects of its cost-cutting measures.
