In early 2025, UPS made headlines with the most extensive layoffs in the company’s history, resulting in the elimination of approximately 48,000 jobs across the United States.
This includes 34,000 workers in operations and 14,000 in management, representing about 7% of the entire workforce. CEO Carol Tomé called it “the most crucial shift the company has ever made,” explaining that UPS is becoming “smaller but stronger.”
Between January and September alone, the company closed 93 facilities nationwide, relocating work to larger, high-tech centers in cities such as Charlotte, Dallas, and Boston. By 2028, UPS plans to close up to 200 buildings in total. By late 2024, machines were already sorting over 63% of packages, and UPS aims to operate 400 automated facilities within three years.
New technologies, such as AI route planning and RFID “smart labels,” are helping to reduce costs and expedite deliveries. While Louisville, Kentucky remains a key logistics center, many other communities are scrambling to help displaced workers find new jobs.
Amazon Breakup and Financial Pressures
A significant reason for the downsizing is UPS’s decision to reduce its business with Amazon, its biggest customer, dramatically. Over the course of 18 months, UPS reduced Amazon shipping volumes by more than half, resulting in a 21% decline in Amazon-related shipments in just one quarter.
CEO Tomé explained bluntly: “Amazon is our largest customer but not our most profitable.” UPS is now focusing on clients that pay better rates.
The company also faced pressure from global trade issues—new tariffs and economic uncertainty caused packages from China to drop by more than 20%. These challenges pushed UPS to accelerate facility closures. The Teamsters union, representing most UPS workers, has fought back against the changes.
UPS offered veteran drivers at least $10,000 to retire early, but only about 2,000 accepted—far fewer than the company hoped. Union president Sean O’Brien accused UPS of breaking promises about creating new jobs and has threatened legal action.
Substantial Profits But Uncertain Future
Despite all the turmoil, UPS’s financial performance has actually beaten Wall Street’s expectations. The company reported earnings of $1.74 per share after the layoffs and its stock price jumped. UPS expects to save $3.5 billion in 2025 from restructuring, with $2.2 billion already saved by September.
However, these savings come with a price tag: more than $600 million spent on severance payments and consulting fees this year alone. Meanwhile, competitors are watching closely.
FedEx remains nearly as large as UPS in the U.S. market, DHL leads in international shipping, and Amazon is rapidly building its own delivery network. As the busy holiday season approaches, some analysts wonder if UPS can maintain good service with 48,000 fewer workers and dozens of closed facilities.
Major banks, including Deutsche Bank and Bank of America, have lowered their price targets for UPS stock, citing concerns about lost Amazon business and weak demand. CEO Carol Tomé’s gamble has yielded short-term financial gains, but many employees and industry observers remain concerned about what comes next.