UPS Restructuring: Job Cuts and Strategic Shifts

United Parcel Service (UPS) plans to cut up to 30,000 jobs and close 24 facilities by 2026, as it reduces deliveries for Amazon to focus on more profitable ventures. Despite these reductions, UPS reported fourth-quarter results exceeding Wall Street expectations and forecasts a rise in annual revenue.

In a strategic pivot, United Parcel Service (UPS) announced intentions to cut up to 30,000 jobs and shutter 24 facilities by 2026, concentrating on more profitable enterprises as Amazon deliveries dwindle. The world's largest package delivery company aims to finish its Amazon 'accelerated glide down plan' by reducing one million parcels daily.

The announcement followed robust fourth-quarter results that surpassed Wall Street predictions, with UPS shares climbing 4% in midday trading. Steps taken include attrition-based job reductions and another buyout offer for full-time drivers, avoiding layoffs. UPS, which has a unionized workforce of nearly 490,000, obtained an 8.3% rise in revenue per piece despite declining volume in its U.S. domestic segment.

Looking forward, UPS estimates 2026 revenue at $89.7 billion, compared to $88.7 billion in 2025, surpassing analysts' forecasts. The company is also adjusting to stabilize volumes post U.S. duty-free e-commerce shipments' conclusion. However, as the peak holiday season remains critical, UPS continues to enhance its pricing strategy, notably removing its MD-11 cargo jets in favor of Boeing 767s.

(With inputs from agencies.)