Why Is UPS Laying Off 20,000 Workers in 2025?
United Parcel Service (UPS) is making headlines with its announcement to eliminate 20,000 jobs and shutter 73 facilities across the United States. This move marks a significant shift in the company’s business strategy and reflects broader changes happening across the corporate world.
But what’s really driving this decision, and how does it tie into a growing wave of mass layoffs from companies like Amazon and Intel?
What’s Behind the UPS Layoffs?
The reasons for UPS’s cuts are multifaceted and rooted in financial pressures, strategic changes, and global market challenges:
1. Losing Amazon as a Major Client
UPS is reducing its package volume from Amazon by 50%. While Amazon was previously its biggest customer, UPS found these shipments came with razor-thin margins. As CEO Carol Tomé put it, this change is about prioritizing profitable business over bulk volume.
2. Falling Margins
UPS is forecasting an operating margin of just 9.3% for the second quarter of 2025-well below investor expectations. The company is also expecting a 9% drop in average daily U.S. package volume.
3. Trade Uncertainty from New U.S. Tariffs
With the Trump administration reintroducing aggressive tariffs-such as a 145% tariff on Chinese goods-cross-border shipping has become more volatile. China-to-U.S. shipments accounted for 11% of UPS’s international revenue in 2024, putting a significant chunk of its business at risk.
Who’s Affected by the UPS Layoffs?
Here’s a snapshot of the impact:
· Jobs lost: 20,000
· Facilities closing: 73 in the U.S.
· Total U.S. workforce: 406,000 (approx. 75% unionized)
· Cost-saving goal: $3.5 billion by 2025
Despite the scale of the cuts, UPS has stated it will honour its labour contract with the Teamsters union, which includes a commitment to create 30,000 union jobs. However, union leaders are watching closely, with Teamsters President Sean O’Brien vowing to fight any contract violations.
What Should You Do If You’re Affected by UPS Layoffs?
If you’re one of the 20,000 employees impacted by UPS’s recent job cuts, it’s important to understand your severance rights. In Ontario, non-unionized employees may be entitled to significantly more than what’s initially offered.
Severance depends on factors like your role, length of service, age, and salary. You could be owed up to 24 months’ pay.
At Whitten & Lublin, our employment lawyers help workers review severance offers and fight for fair compensation. Contact us online or call us at (416) 640-2667 to protect your rights.