The logistics industry was dealt a significant blow this week as UPS announced plans to lay off 20,000 employees and close 73 facilities. This substantial workforce reduction is largely driven by UPS cutting its shipping and delivery volumes for Amazon by 50%, combined with disruptions stemming from the aggressive U.S. tariff policies implemented by former President Donald Trump. These changes reflect broader economic trends, where protectionist policies and evolving trade relationships are reshaping how goods move across borders and affecting the jobs that support them.

Key Drivers Behind UPS Job Cuts

UPS’s decision underscores the profound impact that recent tariffs have had on global trade. According to UPS CEO Carol Tome, the tariffs present the “biggest trade disruption in more than a century,” significantly reducing shipping and delivery demand across several sectors. UPS is particularly vulnerable, given its deep ties to retail giants like Amazon, as well as other China-dependent retailers such as Temu and Shein.

Amazon itself has seen its logistics costs rise due to tariffs, impacting consumer pricing and demand. With approximately 40% of Amazon marketplace sellers based in China, these tariff-driven cost increases directly influence UPS’s shipment volumes and profitability.

The Domino Effect of Tariffs

The ripple effects of tariffs are widespread, affecting supply chains, consumer prices, and global shipping volumes. UPS reports a sharp downturn in deliveries from China-linked bargain e-commerce platforms due to the imminent end of duty-free shipping to the U.S. from companies like Temu and Shein. As these companies adjust by incorporating tariffs into their pricing, consumer demand inevitably softens, leading to reduced shipping volumes.

This challenge isn’t isolated to China-US trade alone. While UPS sees increased activity from alternate sourcing hubs like Vietnam and Thailand, completely offsetting the volume from China, a global manufacturing powerhouse, is a long-term endeavor that cannot swiftly mitigate current disruptions.

Implications for the Logistics Industry

The UPS layoffs serve as an urgent reminder of the vulnerabilities within global supply chains. For logistics managers and business leaders, the need to proactively address tariff implications, diversify sourcing, and increase supply chain visibility has never been clearer.

Strategic freight management solutions, including robust Freight Audit & Payment systems and adaptive Transportation Management Systems (TMS), are essential tools for navigating this complexity.

Companies equipped with clear, accurate logistics data can better forecast tariff impacts, manage inventory effectively, and adjust procurement strategies dynamically to safeguard their operations.

How long do the UPS layoffs last?

​The UPS layoffs are expected to be completed by the end of June 2025. The company announced plans to cut 20,000 jobs and close 73 facilities, primarily due to a strategic reduction in its business with Amazon and broader economic uncertainty. These changes are projected to save the company $3.5 billion in 2025.​

Where are the UPS layoffs happening?

UPS layoffs are happening across the U.S., including facility closures and shift cuts in California, Ohio, Pennsylvania, Oregon, and Colorado, as part of a broader restructuring plan. These closures are part of UPS’s broader strategy to modernize its operations, including implementing automation and artificial intelligence technologies.

Preparing for an Uncertain Future

The reduction in UPS’s workforce highlights the urgency of adopting flexible logistics strategies that mitigate risks associated with tariff-induced trade disruptions. Companies can protect themselves by

  • Diversifying supply chains beyond tariff-heavy regions.
  • Leveraging data analytics for real-time visibility into freight costs and shipment flows.
  • Implementing technology-driven logistics solutions, such as dynamic pricing tools and freight management software.

As global trade dynamics evolve, having agile, data-informed logistics practices will determine which businesses successfully navigate these turbulent times and which face more challenging outcomes.

For more insights on managing supply chain disruptions and enhancing logistics resilience, contact nVision Global today.