UPS Plans to Slash 30,000 Jobs, Shifting from Amazon Shipments
United Parcel Service (UPS), the leading package delivery company globally, has announced significant operational changes for 2026. These plans include cutting up to 30,000 jobs and shutting down 24 facilities.
Job Cuts and Facility Closures
This workforce reduction is part of UPS’s strategy to enhance profitability by focusing on higher-margin shipments. The company’s Chief Financial Officer, Brian Dykes, indicated that the job cuts will primarily occur through attrition, coupled with a second voluntary separation program targeted at full-time drivers.
Recent Operational Adjustments
In 2022, UPS eliminated 48,000 positions, launched voluntary driver buyouts, and closed operations at 93 locations. The firm aims for approximately $3 billion in cost savings this year.
Shift from Amazon Deliveries
UPS has been strategically moving away from low-margin deliveries for Amazon, which has become a growing competitor. CEO Carol Tome noted that the company is in the final phase of an accelerated glide down from Amazon deliveries, intending to reduce one million packages per day in 2026.
Financial Outlook
Despite the reductions, UPS posted robust financial results, exceeding Wall Street expectations for the fourth quarter. The overall revenue for the fourth quarter reached $24.5 billion, surpassing estimates of $24 billion.
Future Projections
- Projected revenue for 2026: $89.7 billion, up from $88.7 billion in 2025.
- Analyst expectations for 2026 revenue: $87.94 billion.
- Adjusted profit per share for the last quarter: $2.38, above the anticipated $2.20.
Market Response
Following the announcement, UPS shares rose by 2.8%, while its competitor, FedEx, saw a 2.5% increase. Analysts have highlighted UPS’s success in increasing revenue per package, with growth recorded at 8.3% in the U.S. domestic segment and 7.1% internationally, despite a decline in shipping volumes.
Challenges Ahead
The company is navigating a complex market landscape, influenced by changes in global trade policies and geopolitical concerns. These factors, along with the commitment to streamline operations away from low-value e-commerce shipments, are key to UPS’s future profitability.
As UPS embarks on these significant transitions, its ability to stabilize volumes and enhance its profit margins will be critical for sustaining growth in the competitive logistics sector.
