In 2025, UPS eliminated 34,000 operational jobs and 14,000 management roles, resulting in a total of 48,000 job cuts—approximately 7% of the company’s employees at the start of the year.
This is the company’s largest layoff in recent history, far exceeding the 20,000 it had expected.
CEO Carol Tomé called it the most crucial shift the company has ever made, aiming to make UPS smaller but stronger.
Facilities Vanish
Between January and September 2025, UPS closed 93 of its U.S. facilities, relocating work to larger, more automated “mega-hubs.”
These closures affected many cities, including Charlotte, Dallas, Boston, and others. UPS plans to close as many as 200 buildings by 2028 to reduce costs further and increase its reliance on automation.
More closures are likely as UPS continues to review all its sites.
Amazon Exodus
A significant reason for these cuts is that UPS decided early in 2025 to ship fewer packages for Amazon, its largest customer, by more than half over 18 months.
That resulted in a massive drop in business—Amazon packages declined by over 20% in just one quarter.
Even so, CEO Tomé said Amazon’s company wasn’t profitable enough, and cutting back helps UPS focus on better-paying customers.
Tariff Turbulence
Besides losing Amazon work, UPS felt pressure from new tariffs and changing economic conditions.
Packages coming from China to the U.S. dropped by nearly 30% as new rules took effect. With less business, UPS upped its planned building closures from 73 to 93.
The company says it’s hard to plan with such unpredictable market shifts.
Savings Nearly Realized
UPS announced it expects to save $3.5 billion in 2025 from the changes. By September, it had already realized $2.2 billion in savings.
The savings primarily result from reducing staff, automating sorting processes, and closing underperforming locations.
Although the plan costs nearly $650 million this year for items such as severance and consultants, UPS says it will complete this new model by 2027.
Louisville’s Heavy Load
Louisville, Kentucky—home to the Worldport air hub—felt the sting of cuts, though Worldport remained open. Nearby centers and other big logistics cities saw jobs vanish.
Local leaders began hunting for new companies to fill job gaps and help laid-off workers.
UPS job losses also hit old union centers in the Northeast and Midwest, with more closures announced in those areas.
Driver Defiance
UPS offered substantial payouts (at least $10,000 each) to veteran drivers to leave early, but only about 2,000 accepted the offer—far fewer than UPS had hoped.
The Teamsters union, which represents most UPS workers, stated that the company was failing to fulfill its promises to create new jobs.
The union called the early retirement program illegal and threatened to fight any moves that hurt union jobs.
Competitor Calculus
While UPS shrank, rivals like FedEx, DHL, and Amazon’s own delivery network watched closely. FedEx is almost as large as UPS in the U.S.
At the same time, DHL leads in international package delivery. Amazon is now handling a significant portion of its own shipping.
Every company built up delivery capacity during the COVID-19 boom, and now they all need to adjust to weaker demand and fewer packages.
Automation Ascendant
By late 2024, UPS had 63% of its packages sorted by machines, and plans to have 400 automated sites by 2028.
New AI systems enable faster delivery route planning and reduce drivers’ mileage. RFID “smart labels” help track packages at every step.
Tech upgrades have already saved UPS nearly $1 billion in one quarter by sending more packages through automated, rather than manual, centers.
The Profit Paradox
After these layoffs and changes, UPS beat Wall Street profit forecasts—making $1.74 per share instead of the $1.31 predicted.
Revenue also jumped above expectations. The stock price went up as the company’s new plan attracted investors.
Still, there’s a strange twist: while the cuts help profits and the company’s stock, the headlines mainly focus on the pain for workers.
Union Battle Lines
The Teamsters union’s president warned UPS not to slash union jobs or breach its 2023 contract, which promised 22,500 new positions.
The contract cost UPS a significant amount—$1.4 billion more in 2024—so the company initially cut thousands of management and contractor roles.
By late 2025, CEO Tomé said UPS wasn’t breaking union rules, but there’s tension and worry over how many union jobs could vanish next.
Leadership Under Fire
CEO Carol Tomé, hired from outside UPS in 2020, is under pressure because the company’s stock has trailed its peers.
Tomé’s strategy is to make UPS smaller by focusing on profit instead of chasing all possible business, especially low-margin customers, such as Amazon.
Even with better-than-expected profits this quarter, net income and revenue are both down from last year, indicating that the transition remains challenging.
Peak Season Gambit
Heading into the busy holiday season, UPS raised shipping fees with only a month’s notice. For oversized and heavy packages, surcharges can now reach as high as $107.
With 48,000 fewer workers and dozens of facilities closed, some worry that UPS may struggle to handle holiday demand and maintain high service quality.
Analysts expect the company to deliver around 25 million packages per day during peak weeks.
Skeptics Sound Off
Some Wall Street analysts doubt that the new plan will be effective in the long term.
Banks like Deutsche Bank and Bank of America have cut their price targets, citing that UPS faces too many risks—such as lost Amazon business, slow demand, higher costs, and intense competition.
The big question is whether automation can compensate for the loss of so many customers and if cost cuts can continue to drive profits upward.
The Crossroads Ahead
UPS faces a big test: can it become a lean, tech-driven delivery powerhouse, or is it shrinking too much? Analysts see only slow growth ahead.
UPS is trying to attract smaller businesses, healthcare, and specialized shipments, but losing 48,000 jobs, closing 93 buildings, and angering unions means a lot is uncertain.
The future will reveal whether UPS’s high-tech push can succeed or if traditional human delivery will still be the most critical factor.