The parcel delivery company is moving forward with a transformation plan that includes center closures, process automation and voluntary departure programs for part of its workforce.
UPS announced the decision to cut up to 30,000 jobs in 2026, as part of a transformation plan that seeks to adjust the operational structure in the face of decreased shipments for its largest customer, Amazon. The measure will directly impact operations and logistics workers in the United States and other regions where the company has a presence, according to official spokespersons and reported by Reuters and CNBC.
According to Reuters reports, the staff reduction will be carried out through voluntary retirement programs for full-time drivers and through the non-replacement of vacancies generated by resignations or retirements. The plan contemplates the closure of 24 facilities in 2026, in addition to the automation of logistics processes, as part of the new business strategy. The company stressed that it does not foresee massive layoffs and that unionized workers will retain the rights acquired in their collective agreements.
According to information collected by BBC News, UPS's decision responds to the strategy of reducing exposure to contracts that generate low profit margins, as is the case with shipments for Amazon, which in 2025 represented a significant portion of the total volume of packages managed by the company. The redesign of the operational network seeks to strengthen more profitable segments and adjust the offer to the new reality of the global logistics market.
Why is UPS eliminating 30,000 jobs in 2026?
The elimination of 30,000 jobs is part of an adjustment process that began the previous year, when UPS cut 48,000 jobs and closed 93 facilities, according to official figures cited by CNBC. The majority of the current cuts will be concentrated in operational positions associated with package handling and delivery, especially in regions where shipping volume for Amazon has decreased or is expected to further reduce.
Brian Dykes, chief financial officer of UPS, explained in a conference with analysts that the job reduction will occur through “natural rotation and new voluntary separation programs for drivers,” according to the transcript published by CNBC. He added that the company seeks to reduce operating hours linked to Amazon's volume drop by 25 million, which will allow it to achieve the objective of adjusting the cost structure.
How will the reduction plan affect UPS workers?
The impact on the workforce will be distributed between operational and administrative employees, prioritizing the non-replacement of vacancies and voluntary retirements. The company had around 490,000 employees in 2024, of which 78,000 were in management positions, according to the annual report cited by Reuters and BBC News.
Unionized employees, represented by the Teamsters union, will retain the rights established in their collective contracts. In a statement reproduced by CNBC, the union organization said: “We are perfectly happy with UPS achieving growth and savings at the corporate level, as long as it respects contractual commitments and rewards the workers who make the company run.”
In addition to voluntary retirement programs, UPS will not replace positions that become naturally vacant, especially for part-time workers, which will contribute to the gradual reduction of the workforce.
Why is UPS reducing its relationship with Amazon?
UPS's decision to progressively reduce its dependence on Amazon responds to a strategy to improve profit margins and optimize the operations network. As reported by Reuters, the company's CEO, Carol Tomé, indicated that "we are in the last six months of our accelerated shipping reduction plan for Amazon," and detailed that in 2026 another million packages will be removed daily from the company's logistics network.
According to BBC News, the firm considers that the contracts with Amazon are “extraordinarily dilutive” for the group's overall profitability, so the focus will be on attracting higher-margin corporate clients, such as health companies and small and medium-sized companies.
The American logistics market has experienced significant changes with the advancement of Amazon as its own delivery operator. According to data from BBC News, in 2024, Amazon managed 6.3 billion shipments in the United States, surpassing UPS and FedEx, and it is estimated that by 2028 it could also surpass the United States Postal Service (USPS) in delivery volume, according to the Pitney Bowes index.
What changes will UPS implement in its network and operations?
UPS's adjustment plan includes the closure of 24 facilities in 2026, adding to the 93 closed in 2025, according to data confirmed by CNBC and BBC News. In addition, the company is advancing in the automation of processes, with the aim of improving efficiency and reducing costs associated with the delivery of packages.
The company announced the early retirement of its fleet of MD-11 aircraft, which represented around 9% of the total aircraft, following a fatal accident in Louisville, Kentucky, in November 2025. These aircraft will be replaced by Boeing 767 models, according to what was reported by Reuters.
Chief Financial Officer Brian Dykes noted that the plan to reduce the relationship with Amazon will save a total of $3 billion, optimizing the cost structure and allowing the company to focus on more profitable segments.
How will UPS's revenue and strategy evolve?
In the fourth quarter of 2025, UPS reported consolidated revenue of $24.5 billion, exceeding market expectations, as highlighted by Reuters. Adjusted earnings per share reached $2.38, compared to the $2.20 forecast of analysts surveyed by LSEG.
The projection for 2026 anticipates total revenues of 89.7 billion dollars, a figure higher than the 88.7 billion estimated for 2025. The company expects that the reduction of the relationship with Amazon will cause a drop in revenues in the first half of the year, but expects a recovery in the second half, once the adjustments in the operations network are completed.
UPS's share price rose 4% after the announcement of the reduction plan, while FedEx's rose 2.6%, according to Reuters and CNBC.
What implications does the adjustment have for the logistics sector and UPS customers?
The restructuring of UPS reflects the transformation of the logistics sector in the United States and the advancement of Amazon as its own operator. Capacity reduction linked to lower-margin shipments will allow the company to focus on segments of higher strategic value, such as healthcare, technology and business-to-business trade, according to the Reuters and BBC News analysis.
The impact for customers will depend on the region and type of contract. Small and medium-sized businesses, as well as corporate customers requiring specialized services, could benefit from the new strategy, while large e-commerce retailers will face a reduced offering of delivery services from UPS.
The workforce adjustment and the automation of operations mark the beginning of a new stage in the competition for the parcel market in the United States, where technological innovation and operational flexibility will define the leadership of companies in the coming years.
0 Comments