Why Amazon and UPS Are Shedding Workers While Profits Rise

The pink slips hit inboxes at 8:00 AM in Seattle. 3 hours later, a different kind of notification went out to drivers in Atlanta. By lunch, 46,000 jobs were gone.

If you thought the tech layoffs of 2023 or 2025 were the main event, you were wrong. Today proves they were just the rehearsal. Amazon and UPS, two companies that arguably define the modern American economy more than any others, just simultaneously declared that they have too many people.

But they aren’t doing it because they are broke. They are doing it because the rules have changed. Amazon is betting everything on AI to replace the middle-manager layer it spent a decade building. UPS is firing its biggest customer to save its own margins.

This isn’t a recession. It’s a renovation. And it is going to be painful.

The Amazon Cull: 16,000 Roles Vanish

Amazon just cut 16,000 corporate jobs. If you add the 14,000 they quietly removed back in October 2025, that is 30,000 white-collar workers gone in under four months.

CEO Andy Jassy isn’t hiding the reason, though he is trying to soften the phrasing. He talks about “culture” and “bureaucracy.” He says the company needs to get its “startup speed” back. But look at where the cuts are happening. They aren’t firing the people who pack boxes. They are firing the people who manage the people who manage the projects.

The cuts are slicing through Amazon Web Services (AWS), Human Resources (PXT), and the retail arm. These are the divisions that used to be safe. AWS is the profit engine. Why cut there?

Because the engine runs itself now.

Jassy and his team have realized that the “bureaucracy tax”—the cost of having managers approve other managers’ decisions—is higher than the value those managers create. And now, they have a tool to bypass it. Generative AI is writing the basic code that junior engineers used to write. AI agents are handling the internal HR tickets that used to require a team of hundreds.

Beth Galetti, the head of HR at Amazon, sent the memo. She said this isn’t the start of a “new rhythm” of constant layoffs. Employees aren’t buying it. The internal message boards are lighting up with a mix of anger and resignation. The 90-day clock has started. That is the window affected employees have to find another job inside Amazon. In 2021, that was easy. In 2026, with every team shrinking, it is nearly impossible.

This is a specific type of cleaning house. Amazon is also killing off the zombie projects that never really worked. The cashier-less “Amazon Go” stores? Mostly closing. The “Amazon One” palm-scanning payment tech? Being scrapped. They are stripping the company down to the studs: e-commerce, cloud, and advertising. Anything that requires a thousand people to sit in a room and “ideate” is on the chopping block.

The UPS Pivot: Breaking Up is Hard to Do

While Amazon is trying to become a robot, UPS is trying to become a boutique.

The news from Atlanta is even bigger in raw numbers. UPS is cutting 30,000 jobs this year. Unlike Amazon, these aren’t mostly coders and managers; these are operational roles.

For a decade, UPS and Amazon were in a bad marriage. Amazon flooded UPS with millions of boxes every day. It looked like growth. But it was empty calories. Amazon negotiates ruthlessly. They pay rock-bottom rates. UPS drivers were running ragged delivering Amazon smiles, but UPS wasn’t making enough profit on those packages to justify the headache.

CEO Carol Tomé has finally had enough. She calls it the “glide-down.” It’s a polite way of saying “we are dumping you.”

UPS is voluntarily cutting the volume of Amazon packages it accepts. They plan to drop another million packages a day in 2026. When you move fewer boxes, you need fewer people.

The 30,000 cuts will happen through attrition—just not hiring people when others quit—and voluntary buyouts. But don’t let the soft language fool you. They are also closing 24 massive sorting facilities in the first half of this year alone. If your local hub closes, “attrition” feels a lot like a layoff.

The Teamsters union is furious. They see this as a betrayal of the historic contract they signed a few years ago. They argue that UPS is handing the future of delivery over to the gig economy and Amazon’s own non-union delivery network. They might be right. UPS wants to focus on delivering high-value stuff: medical supplies, expensive industrial parts, and small business shipments where the sender pays full price. They are done being Amazon’s overflow valve.

The Efficiency Trap

Why today? Why both of them?

It’s the economy of 2026. We are in a weird spot. Revenue is up. People are spending money. But companies are obsessed with “revenue per employee.”

Wall Street loves this. UPS stock jumped 2% on the news of the layoffs. Amazon shares are ticking up. Investors see 46,000 fewer salaries to pay and they see higher margins. They see efficiency.

But for the actual economy—the one where people pay rent and buy groceries—this is dangerous.

We spent the pandemic years (2020-2022) hiring everyone who could breathe. Tech companies stockpiled talent just so competitors couldn’t have them. Now, the bill has come due. The interest rates are no longer zero. You can’t afford to pay people to sit on a “bench” and wait for work.

Amazon’s move is particularly chilling because it signals that the AI threat to jobs is no longer theoretical. It is here. When Jassy talks about “removing layers,” he means removing the humans who used to process information. AI processes information faster and cheaper.

If Amazon can run AWS with fewer engineers, every other software company is going to look at their own headcount and ask, “Why do we have so many people?”

The Human Cost of “Right-Sizing”

Let’s get concrete about what this means for the people losing their jobs.

At Amazon, the “PXT” (People Experience and Technology) division is taking a massive hit. These are the recruiters, the training coordinators, the HR partners. Cutting them is a dark signal. You only fire the recruiters if you don’t plan on hiring anyone new for a long time.

For the Amazon workers, the severance is standard, but the market is cold. If you are a mid-level project manager in Seattle, you are suddenly competing with 15,999 other people with your exact resume.

At UPS, the pain is different. These are often union jobs with pensions and benefits. A “voluntary separation” might look good on paper, but it strips a community of stable income. When a UPS hub closes in a town, it doesn’t just hurt the drivers; it hurts the local diner, the gas station, and the tax base.

UPS CFO Brian Dykes calls this a “tactical move.” He says they are “right-sizing the network.” It’s corporate-speak for shrinking the business to save the profit.

The Amazon-UPS Divorce Implications

The split between these two giants changes how you will get your stuff.

Amazon doesn’t need UPS anymore. They have built their own delivery network that is now larger than UPS or FedEx. You’ve seen the blue vans. Amazon has effectively insourced its own logistics. They used UPS for the hard stuff—the rural driveways, the heavy items, the overflow during Christmas.

Now, Amazon is saying, “We’ll handle it.” And UPS is saying, “Good riddance.”

This means Amazon is becoming a completely closed loop. They make the marketplace, they host the website (AWS), they warehouse the goods, and they deliver the package. They are an island nation.

UPS, meanwhile, is trying to become the “anti-Amazon” carrier. They want to be the premium option. They want to be the carrier you trust with a $5,000 medical device, not a $5 tube of toothpaste.

The “Culture” Excuse

Andy Jassy’s memo deserves a closer look. He blamed “culture” for the cuts. He said Amazon has lost its way.

“We need to be leaner,” he wrote. “We need more ownership.”

It’s a classic CEO tactic. Blame the bloat. Make the employees feel like they caused the problem by being too slow or too bureaucratic. But who hired them? Who created the layers? The same executives who are now firing them.

The truth is, Amazon grew too fast. They bought Whole Foods, MGM, One Medical, Roomba (or tried to), and a dozen other things. They created a sprawling mess of disconnected businesses. Now, Jassy is cleaning up Jeff Bezos’s experiments.

Closing the Amazon Fresh stores is a huge admission of failure. Amazon spent billions trying to crack physical grocery stores. They failed. The “Just Walk Out” technology was cool, but it was expensive and, ironically, required thousands of humans in India to review video footage to make it work. It wasn’t actually automated; it was just outsourced. Now, they are cutting their losses.

What Happens Next?

If you work in tech or logistics, you need to pay attention to this day. January 28, 2026, is a benchmark.

For the rest of the year, expect “copycat” layoffs. When the big dogs eat, the little dogs eat. When the big dogs starve, the little dogs starve. Other CEOs will look at Amazon cutting 16,000 jobs and say, “Well, if they can do it, so can we.” It gives them air cover to cut costs without spooking investors.

We are seeing a shift from “growth at all costs” to “profit per employee.”

The job market is going to get weird. We might see high unemployment in specific sectors (middle management, coding, logistics operations) while other sectors (healthcare, trades, AI implementation) are desperate for workers.

The unspoken reality is that 2026 is the year AI stops being a toy and starts being a coworker—or a replacement. Amazon is just the first to admit it at this scale. They aren’t replacing these 16,000 people. They are replacing the need for them.

A New Reality

There is no “In conclusion” here because this isn’t over. This is just the start of the year.

If you are an investor, you are happy. Amazon and UPS are protecting your dividends.

If you are a consumer, you might not notice much, maybe just a different van pulling up to your curb.

But if you are a worker, the ground just shifted. The safety of a “big company job” is gone. The two biggest employers in the logistics chain just proved that loyalty is a line item on a spreadsheet, and they just deleted it.

The “Efficiency Era” is here. And it is ruthless.