Parcel and logistics giant UPS (United Parcel Service) announced Tuesday that it will cut approximately 20,000 jobs through 2025 and close 73 owned and leased facilities by July as part of a global restructuring. The decision is in response to both an uncertain macroeconomic environment and the drastic reduction of shipments from Amazon, its main customer until now.

In a statement quoted by AFP, UPS CEO Carol Tomé explained that the company is executing a transformation strategy to adapt to the new reality: "The macroeconomic environment may be uncertain, but with our actions, we will emerge as an even stronger and more agile UPS."

One of the triggers for the adjustment is the new agreement with Amazon, which will reduce the volume of packages processed by UPS by more than 50% by the second half of 2026. According to statements reported by Business Insider, Tomé was blunt: "Amazon is not our most profitable customer. Their margin is very dilutive to the domestic business in the U.S."

To CNBC, Tomé added that several alternatives were explored and that reducing the relationship with Amazon was "the best option for the company."

UPS currently has about 490,000 employees, according to FactSet, and while it did not specify which regions the cuts will be concentrated in, the company warned that it could close even more facilities, depending on the ongoing assessment.

In parallel, UPS reported first-quarter 2025 earnings of $1.19 billion, or $1.40 per share, up 7.2% versus the same period last year. Excluding one-off items, earnings were $1.49 per share, above market expectations. Revenue, on the other hand, fell 0.7% to $21.55 billion, although it also beat Zacks Investment Research forecasts.

Trump vs. Bezos

To complete the picture, the relationship between Amazon and the Trump administration became publicly strained. As revealed by CNN, President Donald Trump personally called Jeff Bezos after learning that Amazon was considering displaying on its platform the weight of tariffs on the final prices of certain products.

The measure - initially reported by Punchbowl News - would have allowed consumers to see how much of an item's price was tariffs, something that generated annoyance at the White House. One official quoted by CNN acknowledged, "Of course I was angry - why should a multibillion-dollar company pass the costs on to consumers?"

Trump, however, called the call a positive one. "Jeff Bezos was very gracious. He was great. He solved the problem very quickly. Nice guy," the president told reporters, according to CNN.

White House press secretary Karoline Leavitt called the move a "hostile and political act," and even referenced an old Reuters report on alleged Amazon ties to Chinese propaganda entities, claiming it was "another reason why Americans should buy American."

An Amazon spokesman told CNN that the proposal "was never considered for Amazon's main website," although they did consider including import charges on certain products within its Haul platform, dedicated to low-cost items. The measure, he said, "was not approved and is not going to happen."

Other platforms such as Temu and Shein, which also import mostly from China, have already begun to break out tariff charges in the checkout process, a growing trend in the face of the new trade landscape.

The UPS announcement and the tension between Trump and Bezos reveal a broader backdrop: the current administration's tariff policy is directly impacting the business model of large logistics and e-commerce companies. Since returning to office, Trump has imposed tariffs of 145% on imports from China and a minimum of 10% on all other countries, which is redefining supply chains and making it more expensive for global firms to operate.

Amazon itself has seen its shares fall about 1% in Tuesday trading, and Bezos' net worth is down $30 billion so far this year, according to the Bloomberg Billionaires Index, in part because of these policies.

Although Bezos has sought overtures to the president-including private dinners at the White House, a $1 million donation to the inaugural fund and a documentary on Melania Trump-the relationship remains strained.