Big brown trucks are a staple of the American driveway. For decades, seeing a UPS driver was a sign of a booming economy, or at least a very busy holiday season. But lately, things have gotten quiet—too quiet. The news hit like a ton of bricks: 20,000 jobs. Gone.
Actually, the number is even bigger when you look at the full 2024–2025 timeline. By late 2025, reports indicated the total workforce reduction had ballooned toward 48,000 positions. It’s a staggering figure for a company that once seemed bulletproof.
You’ve probably seen the headlines. You might even know someone who was handed a pink slip or offered a "voluntary buyout." But the real question is: Why is UPS cutting 20000 jobs right now when we’re still ordering more stuff online than ever?
It isn't just one thing. It's a "perfect storm" of high-tech robots, a massive breakup with Amazon, and a global economy that’s feeling a bit shaky.
The Amazon Breakup: It’s Not Me, It’s Your Margins
For years, Amazon was the golden goose for UPS. They were the biggest customer on the block. But honestly, it was a complicated relationship. Amazon packages are "low-margin" business. In plain English? UPS was doing a ton of work for very little profit per box.
CEO Carol Tomé didn't mince words about it. She basically decided that if a package doesn't make the company enough money, they don't want to carry it. By the second half of 2025, UPS reached an agreement to slash its Amazon volume by more than 50%.
When you lose that much volume, you don't need the same amount of people to move it. It’s simple math, even if it’s brutal for the workers involved. They are pivoting toward "high-value" shipments—think complex healthcare logistics or small business accounts—where they can charge more and do less "grunt work" for the retail giants.
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The "Network of the Future" is Kind of Scaring Everyone
UPS isn't just firing people; they're replacing them with machines. They call it the Network of the Future. It sounds like a sci-fi movie, but for thousands of employees, it’s a reality that’s costing them their livelihoods.
By late 2024, UPS had already shuttered nearly 45 operational facilities. Their goal? To eventually close around 200 U.S. buildings. They’re consolidating everything into massive, high-tech hubs.
How Automation is Changing the Game:
- Automated Sorting: In the old days, humans did the heavy lifting of sorting packages. Now, machines handle about 63% of that volume.
- Route Optimization: AI is now telling drivers exactly where to go to save every drop of fuel.
- End of the "Day Shift": Several major hubs, like the one in Baltimore, saw their entire day shifts eliminated as the company streamlined when and how packages move.
Management is the Primary Target
Interestingly, the 20,000-job cut announced in early 2025 wasn't aimed at the drivers you see on the street. At least, not primarily. Carol Tomé specifically targeted management and contracted roles.
Why? Because UPS found itself with too many "layers."
They had managers managing managers. By stripping away these middle-management layers, the company saves roughly $1 billion. They’re trying to become "leaner" and "more agile." In corporate-speak, that usually means fewer desks and more software.
It’s worth noting that the Teamsters union, which represents the drivers, has a very strong contract. While some operational roles were cut through "voluntary buyouts" and facility closures, the union-protected drivers have a much higher level of job security than the folks in the corporate offices in Atlanta.
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The Global Trade Headache
We also have to talk about the world stage. It’s messy.
The reintroduction of aggressive tariffs—some reaching as high as 145% on certain Chinese goods—has thrown a wrench in international shipping. Cross-border trade between China and the U.S. accounted for about 11% of UPS’s international revenue in 2024.
When tariffs go up, shipping volume goes down. People stop ordering as much from overseas, and businesses find different ways to move their goods. Tomé called this the "most profound shift in trade policy in a century." That’s not an exaggeration. When the flow of goods across the ocean slows to a trickle, the people who move those goods are the first to feel the pinch.
Is the "Post-Pandemic Hangover" Real?
During the pandemic, we were all stuck at home buying air fryers and sweatpants. UPS (and FedEx and Amazon) hired like crazy to keep up.
But that "peak" wasn't permanent.
The "post-COVID normalization" hit hard. Shipping volumes started dropping as people went back to physical stores or spent their money on travel instead of cardboard boxes. UPS is essentially right-sizing. They’re shrinking back down to a size that matches today’s reality, not the artificial boom of 2021.
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What Most People Get Wrong About These Layoffs
A lot of folks think UPS is "going broke." They aren't. In fact, they still pull in billions in revenue. The 3rd quarter of 2025 saw consolidated revenues of $21.4 billion.
The cuts are a proactive strategy, not a desperate last resort. They are trying to satisfy investors who want to see higher profit margins. Investors don't just want a company that makes money; they want a company that makes more money with fewer expenses. By cutting 20,000 to 48,000 jobs, UPS is signaling to Wall Street that they are serious about efficiency.
Actionable Insights for the Future
If you're watching this situation closely—whether you're an investor, a small business owner, or someone looking for a career in logistics—here is what you need to keep in mind:
- Watch the Automation Trend: Logistics is no longer a "labor-heavy" industry. It’s becoming a "tech-heavy" industry. Skills in automation maintenance and AI-driven logistics software will be much more valuable than traditional warehouse experience.
- Small Businesses Should Diversify: If you rely on UPS, be aware that they are focusing on "high-value" customers. Shipping costs for standard retail items might continue to rise as UPS de-prioritizes the "low-margin" Amazon-style packages.
- The "Lifetime Career" is Fading: The era of staying at a company like UPS for 40 years is becoming harder to find. The company is moving away from its traditional model of promoting solely from within and toward a more "agile" (read: temporary) workforce structure.
- Keep an eye on the de minimis rule: Changes to the $800 duty-free threshold for imports will continue to impact how many small packages come from overseas. If these rules tighten further, expect even more "right-sizing" in the international shipping sector.
The reality of why is UPS cutting 20000 jobs is that the company is trying to survive in a world where humans are expensive and robots are getting cheaper. It’s a cold transition, but for the "Big Brown Machine," it’s the only way they see to keep the wheels turning in 2026 and beyond.
To stay ahead of these shifts, professionals in the shipping space should focus on acquiring technical certifications in supply chain automation or data analytics, as the demand for manual labor continues to be "reconfigured" out of the network.