Parcel delivery giant UPS has announced plans to cut up to 30,000 jobs in 2026 as part of a strategy to reduce its reliance on Amazon. The world’s largest package delivery company has been scaling back shipments for its biggest customer, Amazon, citing that these deliveries are “extraordinarily dilutive” to its profit margins.
The job cuts will primarily come from voluntary buyouts offered to full-time drivers and through attrition, with the company not replacing employees who leave voluntarily. Despite these reductions, UPS reported earnings of $24.5bn (£17.7bn) for the final quarter of last year. Additionally, it forecasts a surprise increase in annual revenue to $89.7bn for 2026.
UPS Reduces Amazon Deliveries to Boost Profit Margins
UPS’s decision to cut jobs is part of its broader turnaround plan to reduce its dependence on Amazon, a shift that began in 2025. The company aims to focus on more profitable customers, including those in the healthcare sector. As part of this strategy, UPS cut 48,000 jobs and closed 93 facilities last year. It is also planning to shut down 24 more facilities in the first half of 2026.
The company is entering the final phase of its “Amazon accelerated glide down plan,” according to CEO Carol Tome. By the end of 2026, UPS intends to reduce its daily Amazon deliveries by one million pieces while continuing to reconfigure its network.
UPS Job Cuts and Company Restructuring
In its 2024 annual report, UPS revealed that it had about 490,000 employees, with nearly 78,000 working in management. The company’s workforce is unionized. Despite the job cuts, UPS remains confident in its ability to manage restructuring while staying profitable.
UPS also made headlines for retiring its fleet of MD-11 cargo planes after a fatal crash in Louisville, Kentucky, in November 2025. These planes, which constituted about 9% of the company’s fleet, had been grounded following the accident. This move aligns with UPS’s efforts to streamline operations and improve safety.
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Amazon’s Growing Delivery Network
Amazon’s increasing control over its own delivery services is also putting pressure on UPS. In recent years, Amazon has been rapidly expanding its delivery network, challenging UPS, FedEx, and the US Postal Service (USPS). In 2024, Amazon handled 6.3 billion deliveries in the United States, surpassing both UPS and FedEx. By 2028, Amazon is expected to overtake USPS in US delivery volumes, according to Pitney Bowes’ parcel shipping index report.
As UPS continues to adjust its business model, Amazon’s rise in the delivery industry highlights a significant shift in the logistics sector. UPS’s job cuts and restructuring efforts come as it works to remain competitive in an increasingly crowded market.
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UPS shares closed slightly higher in New York trading on Tuesday, despite the announcement of job cuts and the ongoing restructuring efforts. The company’s moves highlight the challenges it faces in an evolving delivery landscape.
