UPS plans to cut 20,000 jobs and close 73 facilities as it reduces reliance on Amazon for its delivery services. UPS said its decision is unrelated to tariffs and that the Amazon partnership itself was “not profitable for us.” The company has around 490,000 employees and operates in over 200 countries, with these layoffs expected to impact 4% of its workforce. UPS said it expects to save $3.5 billion this year with the consolidation plan.

This decision comes after reaching an agreement with Amazon to decrease shipping with them by more than 50% in the second half of 2026. The company’s first quarter earnings showed $21.5 billion in revenue, a 0.7% decrease from 2024, further encouraging action. Teamsters, an American labor union that represents 75% of UPS workers, responded to the job cuts in a statement.

“If the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight,” Teamsters General President Sean O’Brien said in a statement. A contract between Teamsters and UPS mandates that 30,000 Teamster jobs be created. O’Brien said that it would be “hell of a fight” with UPS if the contract agreement falls through.

Teamsters is not all that UPS has to face, as President Donald Trump’s trade war will also impact the company’s profit.

Last year, 11% of UPS’s revenue was from shipping from China to the U.S., USP CEO Carol Tomé explained in an earnings call.

“Our China to U.S. trade lines are our most profitable trade lines,” Tomé said.

But with 145% tariffs on China and the “de minimis exemption” no longer in place, which allowed buyers to import goods worth $800 without a tax burden, American consumers could slow down their purchases, making companies like UPS and FedEx feel a drain on their profits.

In UPS’s quarterly earnings statement, it mentions the risk of global trade with the new policies.

“The world hasn’t been faced with such enormous potential impacts to trade in more than 100 years,” Tomé said. 

To prepare and help customers, UPS uploaded a page on its website, “2025 Tariffs and Their Impact on Global Trade,” dedicated to helping people understand tariffs and their recent developments.

But shoppers are starting to prepare for the shockwave of the tariff hit.

“There’s so much uncertainty in the back half (of the year), because all those (tariffs) will ultimately impact the US consumer,” Tomé said. “Current consumer sentiment is down from where it was at the beginning of the year. (But) the consumer is still pretty healthy.”