UPS Layoff: Little-Known Reasons Behind 20,000 Job Cuts

UPS is preparing to cut around 20,000 jobs in what’s shaping up to be one of its biggest workforce reductions in recent years. The company says this decision is largely tied to rising costs and a slowdown in global shipping — and it’s pointing a finger at tariffs introduced during the Trump administration as a key contributor to the ongoing UPS layoff.

UPS, one of the world’s biggest delivery and logistics companies, says it’s feeling the long-term effects of trade policies that were put in place years ago, particularly those that increased the cost of doing business with countries like China. With global trade still reshuffling in response, UPS has seen a drop in package volumes — and that means it can no longer support its current staffing levels, leading to the UPS layoff.

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The Tariff Problem That Won’t Go Away

During a recent statement, UPS CEO Carol Tomé explained that the tariffs imposed on Chinese imports under former President Donald Trump have had a lasting impact on their operations, contributing to the need for significant UPS layoffs.

“These tariffs have driven up our costs and changed global shipping patterns in ways that continue to hurt our business,” Tomé said.

While the tariffs were originally introduced as a way to pressure China into changing its trade practices, they also raised prices for many U.S. companies — including logistics firms like UPS that are closely tied to international commerce.

Even though some of those tariffs remain in place years later, the effects are still being felt. Global companies have rerouted supply chains, scaled back shipments, and adapted in ways that don’t always favor American freight and delivery firms.

A Drop in Shipping Volumes

It’s not just tariffs. UPS has also been hit by a drop in overall demand. After a boom during the pandemic — when online shopping and home deliveries surged — things have slowed down considerably. Inflation and tighter consumer spending are partly to blame, along with fewer imports from countries like China.

According to UPS’s latest reports, international shipping revenue is down nearly 10% compared to last year. Ground deliveries in the U.S. have also slowed, leaving the company with more staff than it now needs.

“We’ve invested in tech and tried to streamline, but at the end of the day, we just don’t have the same volume we used to,” Tomé said.

Who’s Affected by the Layoffs?

The layoffs will hit various parts of the company — from warehouse workers and delivery drivers to corporate staff. UPS plans to phase in the job cuts throughout 2025. Some positions may be left unfilled as people retire or leave on their own, but others will be directly laid off.

The Teamsters union, which represents hundreds of thousands of UPS employees, responded strongly to the news. Union leaders criticized the company for focusing too much on profits and not enough on workers, especially after making strong earnings during the pandemic.

“UPS made billions during COVID and now they’re turning their backs on the very people who kept them running,” said Sean O’Brien, president of the Teamsters. “Blaming trade policy now feels like a distraction.”

The union also said it will closely examine the layoffs to make sure UPS is respecting the terms of its labor agreements.

A Renewed Look at Trade Policy

The news from UPS has sparked renewed debate about the lasting effects of Trump’s trade policies. Some economists argue that the tariffs helped protect American industries. Others say they’ve had unintended side effects, like hurting companies that rely on smooth global trade.

“Tariffs act like a tax — and when you add up all the costs, it affects companies like UPS that move goods around the world,” said Maria Hsu, an economist at the Brookings Institution. “Many of the shifts in trade routes we saw during the trade war are still in place today.”

While President Biden has rolled back some trade restrictions, many of Trump’s tariffs remain — especially those targeting China. And while they were aimed at leveling the playing field, businesses like UPS say they’ve created long-term complications that still haven’t been resolved.

Reactions from lawmakers have been mixed. Some Republicans argue that UPS is just looking for someone to blame, saying that inflation and labor costs under Biden’s administration are the real issues. Meanwhile, Democrats have called for a more balanced approach to trade policy that considers both workers and businesses.

What’s Next for UPS?

Despite the challenges, UPS is trying to pivot. The company is investing in automation, electric delivery vehicles, and new technologies to improve efficiency. But those advances often mean fewer jobs — not more.

This layoff news could be just the beginning. Other major logistics companies like FedEx and DHL are also facing similar pressures. With rising fuel costs, slower demand, and a changing global economy, the entire shipping industry may be heading into a period of major transition.

For the 20,000 employees who could soon be out of work, the future is uncertain. UPS has said it will offer severance pay and job placement help, but for many, the announcement is a major blow.

“We know these are difficult decisions, and we don’t make them lightly,” said Tomé. “But we have to make sure UPS is positioned for the future.”

Final Thoughts

UPS’s decision to lay off 20,000 people highlights how complex and far-reaching the effects of trade policy can be. While the Trump-era tariffs may have been designed to protect U.S. industries, they’ve also disrupted the very businesses that power global commerce. Add in inflation, shifting consumer habits, and a tough economic landscape, and it’s clear why a company like UPS is being forced to make tough calls.

Whether or not the rest of the industry follows suit remains to be seen, but one thing is clear: the aftershocks of global trade wars are still shaking the foundations of American business.