UPS plans to cut 20,000 jobs and automate hundreds of facilities
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 鈥済lide down鈥� 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 鈥渘ot profitable for us, nor a healthy fit for our network.鈥�
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 U.S. buildings by the end of June as the next part of that 鈥済lide down鈥� 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.
鈥淲ith this reconfiguration, we will also lessen our dependency on labor,鈥� she said.
The Teamsters union, which represents more than 300,000 UPS hourly workers, said it would fight layoffs of any of its members.
鈥淚f UPS wants to continue to downsize corporate management, the Teamsters won鈥檛 stand in its way,鈥� said the union鈥檚 president, Sean O鈥橞rien. 鈥淏ut if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.鈥�
In response, UPS spokesman Glenn Zaccara said the company intends to live up to all the terms of its contract.
UPS did see some effects from Trump鈥檚 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 鈥渘ot thinking about exiting the business.鈥� But she also said that many of them don鈥檛 know exactly what their next step will be. Many are still hoping for a tariff roll-back.
鈥淐andidly, there鈥檚 so much uncertainty around the China orders,鈥� she said. 鈥淲e know what鈥檚 been announced. We don鈥檛 know actually if it will happen, and we don鈥檛 know if it will stick. We think there are many things we don鈥檛 know.鈥�
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.
鈥淭here鈥檚 so much uncertainty in the back half (of the year), because all those (tariffs) will ultimately impact the U.S. consumer,鈥� she said. 鈥淐urrent consumer sentiment is down from where it was at the beginning of the year. (But) the consumer is still pretty healthy.鈥�