UPS will cut 20,000 jobs this year, about 4% of its global workforce, the company said Tuesday. But UPS added the decision is unrelated to tariffs and is instead due to increased use of technology and a previously announced plan to trim its Amazon business.
UPS in January announced a “glide down” plan to cut its business with Amazon, its largest customer, in half by the middle of 2026. UPS CEO Carol Tome said Tuesday that most of the Amazon business that it is giving up is “not profitable for us, nor a healthy fit for our network.”
The UPS package volume from Amazon was already down 16% in the just-completed quarter, which was a bigger drop than UPS had forecast for the period. UPS said it will close 73 US buildings by the end of June as the next part of that “glide down” plan.
UPS also said it expects to use more automation in its facilities, from sorting packages to label application to loading and unloading trucks, with 400 facilities becoming partly if not fully automated.
“With this reconfiguration, we will also lessen our dependency on labor,” she said.
UPS did see some effects from Trump’s broad tariffs of 10% on most imports, though, especially the 145% tariffs on Chinese imports. But the company is still uncertain about the ultimate effects.
Tome said customers that do a lot of business with China are “not thinking about exiting the business.” But she also said that many of them don’t know exactly what their next step will be. Many are still hoping for a tariff roll-back.
“Candidly, there’s so much uncertainty around the China orders,” she said. “We know what’s been announced. We don’t know actually if it will happen, and we don’t know if it will stick. We think there are many things we don’t know.”
UPS does believe its customers will feel an impact from the tariffs, and because of that, and the pull-back from Amazon, it forecast its own revenue will fall in the second quarter compared to a year ago. But it said it is not ready to drop its own full-year guidance, although it warned it could adjust that in the future as well.
“There’s so much uncertainty in the back half (of the year), because all those (tariffs) will ultimately impact the US consumer,” she said. “Current consumer sentiment is down from where it was at the beginning of the year. (But) the consumer is still pretty healthy.”
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