UPS Plans to Cut 20,000 Jobs in 2025 Amid Network Overhaul and E-Commerce Challenges
United Parcel Service (UPS) announced plans to eliminate approximately 20,000 jobs this year, primarily through the closure of dozens of facilities, as part of a strategic effort to respond to declining shipments from its largest customer, Amazon.com. The layoffs will impact delivery drivers and package handlers and are part of a broader network restructuring aimed at increasing efficiency and reducing costs. By the end of June, UPS intends to close 73 leased and owned facilities, with the possibility of additional closures.
This workforce reduction supports UPS’s goal of saving around $3.5 billion in costs this year, following a January announcement to cut the volume of low-margin Amazon parcels by more than half over 18 months. The move reflects the company’s response to a slowdown in e-commerce growth following the pandemic-driven surge, compounded by economic uncertainties stemming from tariffs and global volatility.
The broader economic environment remains uncertain, with industry giants like UPS and FedEx serving as indicators for the health of the economy, given their extensive networks across manufacturing and consumer sectors. Recent trade policies and tariffs introduced by the Trump administration have added volatility, prompting many companies to withdraw or revise their financial forecasts.
In addition to cost-cutting measures, UPS is shifting its focus toward higher-margin, specialized logistics services, including temperature-controlled and urgent healthcare shipments. This strategy is exemplified by UPS’s recent announcement of their plan to acquire Canada’s Andlauer Healthcare Group (AHG) for $1.6 billion. AHG operates nine distribution centers and 22 branches across Canada, providing third-party logistics and specialized transportation solutions for the healthcare sector. Shareholders of AHG will receive CAD $55 per share in cash, reflecting a 31% premium over the last closing price. This acquisition aims to strengthen UPS’s healthcare logistics capabilities and deepen its presence in critical, high-growth sectors, supporting its goal to reach $20 billion in healthcare revenue by 2026.
While UPS refrains from updating its full-year outlook, the company plans to release second-quarter projections shortly, amid ongoing economic and trade uncertainties that continue to influence corporate planning across the industry.
