Job cuts tied to reduced Amazon volumes
Parcel delivery giant UPS announced it will cut up to 30,000 jobs this year as it continues to scale back shipments for its largest customer, Amazon. The company said Amazon deliveries have become “extraordinarily dilutive” to profit margins, prompting a strategic shift toward more profitable business segments.
The job reductions will be carried out through voluntary buyout offers for full-time drivers and by not replacing employees who leave the company. UPS emphasized that the measures are part of a longer-term restructuring plan rather than an abrupt downsizing.
Strong earnings despite restructuring
Despite the planned job cuts, UPS reported solid financial performance. The company posted earnings of $24.5 billion for the final quarter of last year and issued a forecast that surprised markets, projecting revenue of $89.7 billion for the year ahead.
UPS shares ended slightly higher in New York trading following the announcement, suggesting investors welcomed the company’s clearer focus on profitability.
Turning away from low-margin volume
UPS first signaled its intention to reduce reliance on Amazon last year, positioning the move as part of a broader turnaround strategy. The company has been shifting capacity toward customers with higher margins, including healthcare and specialized logistics clients.
In 2025 alone, UPS cut 48,000 jobs and closed 93 facilities as Amazon volumes declined. The company confirmed it will shut an additional 24 facilities in the first half of this year as network reconfiguration continues.
Chief executive Carol Tome said the company is nearing the end of its accelerated plan to reduce Amazon volume, adding that UPS expects to cut another one million packages per day on average throughout 2026.
Fleet changes and operational adjustments
UPS also announced it is officially retiring its MD-11 cargo aircraft fleet, which accounts for roughly 9% of its planes. The decision follows a deadly crash involving an MD-11 in Louisville, Kentucky, last November. The aircraft had been grounded since the incident.
According to its most recent annual report, UPS employs around 490,000 people globally, including nearly 78,000 management staff. Much of its workforce is unionized, making workforce reductions a sensitive issue for the company.
Amazon reshapes the delivery market
Amazon has rapidly expanded its in-house delivery network, reducing its dependence on traditional carriers such as UPS, FedEx and the U.S. Postal Service. In 2024, Amazon handled an estimated 6.3 billion deliveries in the United States, surpassing both UPS and FedEx.
Industry forecasts suggest Amazon could overtake USPS in total U.S. delivery volumes by 2028, underscoring how dramatically the parcel delivery landscape has shifted.
