UPS Layoffs: Around 20,000 employees at United Parcel Service (UPS), a major global parcel delivery company, are set to lose their jobs.
UPS announced this decision as part of a cost-cutting plan amid economic uncertainty and a potential drop in shipments from its largest customer, Amazon.
Last year, Amazon contributed 11.8% to UPS’s total revenue.
Despite announcing job cuts, the news was welcomed by investors.
On Tuesday, UPS shares rose about 2%, as the company shared plans to save $3.5 billion this year through layoffs and the closure of 73 owned and leased facilities by the end of June.
How Did UPS Perform in the March Quarter?
UPS reported revenue of $21.5 billion for the March quarter, slightly higher than analysts’ expectations of $21.05 billion, according to LSEG data.
In its U.S. domestic segment, revenue increased by 1.4% to $14.46 billion. This growth was driven by strong air cargo performance and higher revenue per shipment, even though the total number of parcels went down.
The company posted an adjusted profit of $1.49 per share during the quarter, beating market estimates of $1.38.
What’s the Current Business Situation?
UPS explained that business activity has slowed due to U.S. tariffs, prompting the need for cost-reduction strategies amid declining demand.
In general, the parcel delivery industry is facing weaker shipping demand from businesses, which is affecting overall growth.
UPS CEO Carol Tomé said the economic environment is so uncertain that the company is not offering any updated full-year guidance.
Back in January, UPS had forecast full-year 2025 revenue of $89 billion and an operating profit margin of 10.8%.
Meanwhile, U.S. tariffs are affecting companies tied to Chinese e-commerce. Online sellers like Temu (owned by PDD Holdings) and Shein are seeing a sharp decline in business.
Adding to this, the U.S. government will begin imposing import duties on parcels valued up to $800 starting May 2, which were previously tax-free.
