US shipping giant United Parcel Service (UPS) announced on Tuesday that it will lay off 20,000 employees this year and close 73 office buildings by the end of June to improve the profitability and efficiency of its US business.

Its CEO Carol Tome said that through these measures, UPS will become a larger and more flexible company and will help UPS adapt to the changing trade environment to achieve long-term growth.

UPS pointed out that through cost-cutting plans, it will save $3.5 billion in 2025.

According to the financial report released before the market on Tuesday, the company's revenue in the first quarter of this year fell to $21.5 billion, a decrease of 0.7% from the same period last year, and adjusted operating profit rose slightly by 0.9% to $1.7 billion.

UPS also withdrew its financial guidance for this year, emphasizing that the uncertainty of the macro environment caused by Trump's tariffs has prevented the company from providing forecasts.

Sean M. O’Brien, general president of the Teamsters Union, responded that according to the current agreement, UPS is obliged to create 30,000 jobs for the Teamsters Union. If UPS wants to streamline management, the union has no objection, but if UPS violates the agreement or cancels the jobs of truck drivers, it will face a fierce battle.

Tariff impact

UPS's business lines are spread across more than 200 countries around the world, and currently has a total of 490,000 global employees. Last year, the company announced a layoff of 12,000 people.

It is not clear whether the 20,000 layoffs this year are global layoffs or single layoffs in the US market. But UPS Chief Financial Officer Brian Dykes said in a financial report conference call on Tuesday morning local time that the latest move will enable the company to expand its domestic operating profit margin and improve its operating capacity in the United States.

UPS also explained in a filing on Tuesday that the layoffs were related to the decline in freight volume of its largest customer. The so-called largest customer is the US e-commerce giant Amazon. A UPS spokesperson pointed out that reducing the number of packages from Amazon is UPS's choice because the company pays more attention to the quality of revenue and hopes to improve operating profit margins and profitability in the United States.

An Amazon spokesperson responded that UPS's request to reduce shipping volume was due to operational needs, and Amazon respected its decision and would continue to work with UPS and other carriers.

But on the other hand, both companies also warned of the risk of reduced freight volume under tariff policies. UPS pointed out that from a revenue perspective, in 2024, the revenue from the China-US trade route accounted for 11% of UPS's total international revenue, and the China-US trade route was its most profitable trade route.

The company launched a new tool "UPS Global Verification" to help customers calculate the prepayment amount of tariffs, fees and other costs they need to pay.

Amazon plans to list tariff fees in the selling price of goods, and it also confirmed in a statement that Amazon Haul stores did consider doing so, but the move was not approved.

The plan also triggered fierce criticism from the White House, with White House Press Secretary Karoline Leavitt accusing Amazon of hostile and political behavior if it did so.