UPS Faces Backlash Over 20,000 Job Cuts and 73 Facility Closures
By June 2025, United Parcel Service (UPS) wants to close 73 locations and lay off 20,000 employees. Observers in the industry, labour unions, and employees have all strongly criticised this move. These actions are attributed by the corporation to larger economic issues and a decline in demand from its biggest client, Amazon.
The Size of the Incisions
Over 4% of UPS’s roughly 490,000 employees worldwide are being laid go. These reductions increase the amount of layoffs to 32,000 in less than a year, following a prior decrease of 12,000 jobs in 2024. Despite spending $400 to $600 million on severance and lease termination expenses, the corporation expects to save $3.5 billion in 2025 as a result of these restructuring measures.
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Reasons for the Choice
- Declining Amazon Business: Due to a renegotiated deal with Amazon, the shipping volume has decreased by almost 50%, which has reduced UPS’s profitability in the Amazon business.Chronicle of San Francisco +1
The Sun +1 in the US - Economic Uncertainty: Trade tariffs, especially those levied by the US government, and worldwide economic instability have raised transportation costs and market volatility.The San Francisco Chronicle + The US Sun +
Transition to Automation: In order to cut labour costs and streamline operations, UPS is investing in automation. As part of its “Network of the Future” project, the corporation intends to close over 200 facilities in the United States by 2028.
Responses and Consequences
Several stakeholders have criticised the announcement:
Unions for Workers: Concerns about the job losses and UPS’s move towards automation have been voiced by the Teamsters, who represent UPS employees. They contend that these actions jeopardise working conditions and job security.CBS News Workers: Many UPS workers are worried about the future because they anticipate more layoffs and changes to their responsibilities as automation increases. Industry Observers: According to analysts, UPS may not be able to sustain service standards and customer satisfaction as a result of the cuts, particularly during periods of high delivery demand.
Gazing Ahead
An important turning point in UPS’s history has been reached with the company’s decision to undertake large job cuts and site closures. The immediate effects on workers and the logistics sector continue to be a source of dispute, notwithstanding the company’s long-term cost-cutting and market-adaptation goals. UPS’s future course will be greatly influenced by how well it strikes a balance between automation, cost reduction, and employee wellbeing as it continues to face these difficulties.
One of the biggest logistics firms in the world, United Parcel Service (UPS), has come under fire and raised concerns after announcing intentions to close 73 locations and lay off 20,000 workers by the middle of 2025. Workers, unions, and economic analysts have all strongly criticised the action, which is a part of a broader cost-cutting and restructuring initiative.
A Serious Hit to the Employees
The announcement follows a previous round of layoffs in early 2024 that resulted in the termination of 12,000 employees. In less than a year, the firm will have collectively laid off 32,000 employees, which is a record-breaking reduction for a company the size of UPS. The corporation, which has over 500,000 employees worldwide, claims that these actions are required to cut expenses and simplify operations in a difficult economic environment.During the company’s Q1 2025 earnings call, UPS CEO Carol Tomé stated, “These cuts are extremely painful but necessary.” “To maintain long-term sustainability and competitiveness, we need to restructure our company.”
Amazon’s Declining Impact
The declining amount of business UPS receives from Amazon is among the most important factors. Amazon, which was once UPS’s biggest client, has reportedly renegotiated a pact that drastically decreased the number of goods sent through UPS by more than 50%. Amazon has also become more dependent on its own delivery network.
