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UPS Gears Up for Major Restructuring, Shedding Jobs and Facilities in Strategic Shift
Atlanta, GA – United Parcel Service (UPS) announced a significant strategic overhaul on Tuesday, revealing plans to cut up to 30,000 operational roles and close an additional 24 facilities by 2026. This move is part of the world’s largest package delivery company’s ongoing effort to pivot towards higher-margin shipments and streamline operations.
This latest announcement follows a substantial restructuring in the past year, which saw the company eliminate 48,000 jobs, offer driver buyouts, and shut down operations at 93 buildings. These initiatives were aimed at achieving approximately $3 billion in savings this year.
Chief Financial Officer Brian Dykes stated during a post-earnings call that the upcoming workforce reduction will be managed “through attrition,” and UPS anticipates offering a “second voluntary separation program for full-time drivers.”
A key component of this strategic shift involves a deliberate reduction in deliveries for Amazon.com, UPS’s largest customer and an increasingly competitive delivery rival. In January of last year, UPS initiated a plan to accelerate the reduction of millions of low-profit Amazon deliveries, categorizing the business as “extraordinarily dilutive” to its profit margins.
CEO Carol Tome elaborated on the ongoing transition, noting, “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.”
Despite the planned cuts, UPS shares saw a positive reaction in early trading, climbing 2.8% after the company surpassed Wall Street’s fourth-quarter earnings estimates and projected an unexpected rise in annual revenue. Rival FedEx also saw its shares increase by 2.5%.
As of its 2024 annual report, UPS employed approximately 490,000 individuals, with nearly 78,000 in management positions.
Beyond streamlining its Amazon business, the company is also working to bolster profitability and stabilize volumes in the wake of changes to U.S. duty-free “de minimis” low-value e-commerce shipments.
“In 2025, we operated through a very dynamic macro environment, including significant change in global trade policies and increasing geopolitical concerns,” added CEO Tome.
Financially, UPS recorded a non-cash, after-tax charge of $137 million related to the write-off of its MD-11 fleet, a decision made after a deadly crash in November. The company completed the retirement of this fleet in the fourth quarter.
UPS projects its 2026 revenue to reach $89.7 billion, an increase from the $88.7 billion reported last year. This projection exceeds the average analyst expectation of $87.94 billion, according to LSEG data.
“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,” remarked Evercore ISI analyst Jonathan Chappell.
Strong Holiday Quarter Performance
UPS reported consolidated revenue of $24.5 billion for the fourth quarter, exceeding estimates of $24 billion. The critical holiday shipping season, spanning from late November to early January, is a crucial period for parcel carriers, often seeing daily volumes double and the implementation of seasonal surcharges.
The company’s U.S. domestic segment experienced an 8.3% increase in revenue per piece, despite lower volumes, while international revenue per piece grew by 7.1%, reflecting the company’s successful push towards higher-margin shipments.
Looking ahead, UPS anticipates a dip in revenue during the first half of the year as it concludes the Amazon “glide-down,” with a sequential rise expected in the second half once these reductions are complete.
On an adjusted basis, UPS reported a profit of $2.38 per share for the quarter ending December 31, outperforming estimates of $2.20.