Despite beating its first-quarter profit estimates, UPS is planning to cut 20,000 jobs in 2025 as it continues to scale back its deliveries with Amazon. 

According to CNBC, UPS expects the job cuts — and the shuttering of 73 leased and owned buildings —  to create $3.5 billion in savings for 2025, and impact just over 4% of its total workforce. In January, UPS reached a deal with Amazon to slash delivery volumes with the e-commerce giant by more than half by the end of 2026. Amazon is UPS's largest customer, accounting for 20-25% of the delivery company's U.S. package volumes in 2024, as well as nearly 12% of its revenue. 

In an April 29 earnings call, UPS CEO Carol Tomé said that handling outbound shipments from Amazon fulfillment centers "is not profitable for us," and asserted that it's necessary for the company to rely more on its own automated sorting hubs, which handle roughly 64% of the company's volume. UPS deliveries for Amazon were down by 16% in the first quarter of 2025, with plans for an identical drop in Q2, followed by 30% dips in each of the year's final quarters.

UPS also cut 12,000 jobs in 2024, and has struggled with declines in shipping volumes for years, particularly as Amazon has reduced its reliance on external delivery partners. Since 2023, Amazon has held the second largest market share by parcel volume in the U.S. at 27%, behind the U.S. Postal Service at 31%. UPS expects to soon see a substantial dip in volume from Chinese e-commerce giants Temu and Shein as well, with the U.S. ending duty-free exemptions for shipments valued under $800 starting on May 2. 

"The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier," Tomé said. "The macro environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS."