United Parcel Service (UPS) has announced plans to lay off 20,000 employees and close 164 facilities by the end of 2025, following the release of its first-quarter earnings report on April 29. The decision comes as the global shipping and logistics company responds to a changing economic landscape, including new trade policies and shifting consumer demands.

Carol Tomé, Chief Executive Officer of UPS, addressed the developments in a statement, thanking employees for their ongoing dedication. “I want to thank all UPSers for their hard work and efforts in this very dynamic environment,” Tomé said. “As a trusted leader in global logistics, we will leverage our integrated network and trade expertise to assist our customers as they adapt to a changing trade environment.”

The company’s announcement comes during a time of global economic volatility, influenced in part by trade tariffs and shifting international commerce trends. While specific locations of the closures have not been revealed, UPS confirmed that the changes are part of a strategic effort to reconfigure its network, lower operational costs, and adapt to the current business climate.

The cuts also follow a significant change in the company’s relationship with Amazon, its largest customer. In January, UPS revealed that it would reduce its business volume with the e-commerce giant by approximately 50%. This decision has substantial implications, given the scale of Amazon’s shipping demands and its previous role as a core revenue driver for UPS.

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

UPS, which serves customers in more than 20 countries, reported total revenue of $91.1 billion in 2023. The company currently employs around 490,000 people worldwide. According to its mission statement, UPS remains focused on delivering value through its guiding principles: “Customer First. People Led. Innovation Driven.” Alongside its operational changes, UPS says it continues to support sustainability initiatives and local communities globally.

Despite the major organizational shifts, the company has chosen not to update its full-year financial outlook at this time, citing broader macroeconomic uncertainties. Rising inflation, fluctuating demand, and new international tariffs have created challenges for logistics companies worldwide, and UPS is no exception.

Though the scope of the restructuring is large, it reflects an industry-wide trend as global carriers and logistics providers rethink their strategies in the face of evolving trade routes, automation, and increasing cost pressures. For UPS, the move may allow it to streamline operations, invest in new technology, and align more closely with the needs of a shifting marketplace.

Still, for the thousands of employees affected, the announcement brings uncertainty about the future. UPS has not yet disclosed when or where the layoffs and closures will take effect, though more information is expected later in the year.

In the meantime, company leadership remains focused on adapting to the future of shipping and logistics in a post-pandemic, tariff-conscious global economy. “We are taking bold steps now to ensure our long-term strength and reliability,” Tomé said. “While these are difficult decisions, they are necessary to ensure UPS remains competitive and resilient for years to come.”