UPS to Cut Up to 30,000 Jobs, Close 24 Facilities as Amazon Deliveries Decline

United Parcel Service on Tuesday announced plans to eliminate up to 30,000 jobs and shut down 24 facilities in 2026, as the world’s largest package delivery company accelerates a strategic shift away from low-margin volumes tied to UPS Amazon delivery reduction, focusing instead on more profitable business segments.

Market Reaction and Earnings Beat

Shares of United Parcel Service rose about 4% in midday trading after the company reported fourth-quarter results that beat Wall Street expectations and issued a stronger-than-expected revenue forecast for 2026. Rival FedEx also gained 2.6%, reflecting broader investor optimism in the parcel delivery sector.

 UPS Amazon delivery reduction reported consolidated fourth-quarter revenue of $24.5 billion, exceeding analysts’ estimates of $24 billion. On an adjusted basis, the company posted earnings of $2.38 per share for the quarter ended December 31, well above the consensus estimate of $2.20 per share.

Accelerating the Amazon Glide-Down Strategy

The job cuts are closely related to UPS's plan to cut back on deliveries to Amazon. According to CEO Carol Tomé, the company is in the last stage of its quick effort to cut down on the number of packages it sends to Amazon, which is its biggest customer and a delivery competitor that is getting stronger.

Tomé said on a conference call with analysts, "We're in the last six months of our Amazon accelerated glide-down plan." "We plan to glide down another million pieces per day for the whole year 2026 while we keep changing our network."

Last January, UPS said it would speed up plans to cut millions of low-profit Amazon deliveries. The company called the business "extraordinarily dilutive" to margins. The UPS plan to cut back on Amazon deliveries is part of a larger shift toward serving higher-yield customers and offering premium logistics services.

Scope and Nature of Job Cuts

As Amazon's business slowed down, UPS cut 48,000 jobs in 2025. It also offered drivers buyouts and closed 93 facilities. The new cuts for 2026 will mostly happen through attrition and another offer for full-time drivers to buy out their contracts.

Brian Dykes, the Chief Financial Officer, said that layoffs are not planned. He said that "a lot of the cuts will come from not filling positions when part-time workers leave." He also said that UPS has a lot of unionized workers.

According to its 2024 annual report, UPS had about 490,000 employees around the world, with almost 78,000 of them in management positions. We couldn't get the most recent job numbers for 2025 right away.

Network Optimization and Facility Closures

The company will close 24 facilities in 2026 as part of its broader network reconfiguration tied to the UPS Amazon delivery reduction. Executives said these moves are necessary to align infrastructure with changing volume patterns and to improve long-term efficiency.

UPS and rivals like FedEx have been grappling with persistently soft demand for delivery services, driven by slower e-commerce growth and shifting consumer behavior after the pandemic boom.

Revenue Outlook and 2026 Forecast

According to LSEG data, UPS expects to make $89.7 billion in 2026, up from $88.7 billion in 2025 and more than analysts had expected, which was almost $88 billion. As the Amazon glide-down comes to an end, the company expects sales to drop in the first half of 2026. After that, sales should rise steadily in the second half as the UPS Amazon delivery reduction stabilizes.

UPS also said that it is working to get back to normal volumes after the end of the U.S. duty-free "de minimis" treatment for low-value e-commerce shipments from Chinese retailers like Shein and Temu.

Holiday Quarter Performance

The busiest time of year for shipping packages is from late November to early January. During this time, the number of packages shipped each day can double. UPS's strong performance in the holiday quarter showed that prices were more stable in both the domestic and international markets.

"UPS had another good quarter, mostly because they made more money per package in both their domestic and international operations," said Jonathan Chappell, an analyst at Evercore ISI. He noted that prices stayed strong even though volumes were lower.

Investors seem to like that UPS is focusing on expanding its margins, keeping prices in check, and making money in the long term, even if it means losing some scale.

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