UPS set to eliminate 30,000 jobs in 2026 as the company shifts away from Amazon
Leading global package delivery and supply chain management company, United Parcel Service, is set to cut upto 30,000 operational roles and shut another 24 facilities in 2026. The world's largest package delivery company announced the cuts on Tuesday as part of a planned shift toward higher-margin shipments, which includes reducing shipments for its biggest customer, Amazon. UPS has been scaling back deliveries for the online retail giant, as they are deemed to be "extraordinarily dilutive" to its profit margins, as per the BBC.
In a call with analysts following the company's quarterly earnings release, CFO Brian Dykes said UPS plans to reduce total operational hours by approximately 25 million associated with the Amazon decline, and the company expects to save $3 billion from the shipment cuts. “In terms of variable costs, we expect to reduce operational positions by up to 30,000,” Dykes added, as per NBC News. The executive explained that this will be accomplished "through attrition," and the company expects to offer a second voluntary separation program for full-time drivers. Last year, UPS cut 48,000 positions, including 15,000 seasonal roles, as it adjusted to lower volumes. About 34,000 of the jobs were operational, and 14,000 were management, as per the publication.
Apart from the layoffs, UPS announced that it has identified 24 buildings for closure in the first half of 2026, with additional closures potentially to come later in the year. In the earnings call, Dykes reiterated that the company closed 93 buildings while sharing plans to "further deploy automation" across its network. "We're in the final six months of our Amazon accelerated glide down plan, and for the full year 2026, we intend to glide down another million pieces per day while continuing to reconfigure our network," CEO Carol Tome said on the call, per NBC.
At the same time, the company is also looking to stabilize volumes and increase profitability following the end of U.S. duty-free, "de minimis" low-value, e-commerce shipments. "In 2025, we operated through a very dynamic macro environment, including significant changes in global trade policies and increasing geopolitical concerns," CEO Tome added. For 2026, the company projected revenue to be $89.7 billion, a slight increase from the $88.7 billion it reported last year. However, analysts on average had expected UPS to fetch $87.94 billion last year, according to data compiled by LSEG. " UPS generated another quarterly beat, primarily through (revenue per piece) upside in both domestic and international, continuing the better-than-expected pricing theme of the last few quarters," Evercore ISI analyst Jonathan Chappell told NBC. Following the announcements, shares of the company went up 2.8% in early trading on Tuesday, toppling Wall Street estimates.
On the other hand, as UPS moves away, Amazon has significantly increased its own delivery service in recent years. The e-commerce giant broke the dominance of UPS, FedEx, and the US Postal Service, as it handled 6.3 billion deliveries in 2024, in the U.S. alone, beating both UPS and FedEx. Amazon has further projected to overtake USPS as well by 2028 for US delivery volumes, according to Pitney Bowes' parcel shipping index report.
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