United Parcel Service (UPS) has revealed plans to eliminate up to 30,000 operational positions in 2026, marking a significant escalation in its ongoing corporate restructuring efforts. This move builds upon previous job reductions as the global delivery leader intensifies its focus on a strategic turnaround, driven by a shift towards higher-margin shipments and away from less profitable segments.
Strategic Shift and Financial Performance
The announcement comes as UPS reported quarterly results that surpassed Wall Street expectations during the critical holiday period, with the company also forecasting an unexpected rise in annual revenue. This positive financial outlook underscores the firm's commitment to enhancing profitability amidst a challenging market environment.
Reducing Reliance on Amazon Deliveries
A key component of UPS's strategy involves scaling back millions of low-profit deliveries for Amazon, its largest customer and a growing competitor in the logistics sector. In January last year, UPS described this business as "extraordinarily dilutive" to margins, prompting accelerated plans to reduce such shipments. This pivot aims to stabilise volumes and rebuild profitability, particularly following changes in US duty-free regulations for low-value e-commerce shipments.
Workforce Reduction Details
Chief Financial Officer Brian Dykes outlined that the job cuts will be achieved through attrition and a second voluntary separation program for full-time drivers. This approach follows earlier measures, including the elimination of 48,000 jobs, driver buyouts, and the closure of 93 facilities in 2025, all part of a broader target to realise approximately $3 billion in savings by 2026.
Financial Charges and Fleet Retirement
UPS recorded a non-cash, after-tax charge of $137 million related to writing off its MD-11 fleet, which was retired in the fourth quarter after a fatal crash in November. The company projects 2026 revenue to reach $89.7 billion, exceeding both last year's figure of $88.7 billion and analyst expectations of $87.94 billion, as compiled by LSEG data.
In premarket trading, UPS shares experienced a slight decline of 1%, reflecting market reactions to the restructuring news. As the courier and delivery industry continues to evolve, UPS's actions highlight a broader trend of companies adapting to economic pressures and competitive dynamics in the e-commerce landscape.
