UPS to Cut 30,000 Jobs in Major Cost-Reduction Effort
United Parcel Service (UPS) is set to implement significant job cuts as part of a major cost-reduction initiative. The company aims to eliminate up to 30,000 positions to save approximately $3 billion by 2026. These measures come in the wake of a strategic shift away from its dependence on Amazon for deliveries.
Job Cuts and Strategic Changes
UPS plans to achieve these job reductions primarily through attrition and voluntary buyouts. Brian Dykes, the company’s Chief Financial Officer, announced these changes during an earnings call. The organization is also slated to close 24 facilities in the first half of the year, with further evaluations for potential closures later in 2026.
Financial Context
- Projected savings target: $3 billion by 2026
- Previous savings achieved in 2025: $3.5 billion
- Labour hours eliminated in 2025: 26.9 million
- Facilities closed in 2025: 93
In the latest quarter of 2025, UPS reported revenues of $24.5 billion, contributing to an annual total of $88.7 billion. The firm anticipates revenues will increase to approximately $89.7 billion in 2026.
Concerns from Labor Unions
The anticipated job cuts have drawn criticism from labor unions, particularly the Teamsters. Union President Sean O’Brien expressed discontent, highlighting previous rejections of buyout offers. He emphasized the need for UPS to honor contractual agreements with its drivers, who face demanding working conditions.
In an effort to concentrate on more profitable deliveries, UPS announced a significant reduction in shipments for Amazon, slashing them by half. This move marks a critical shift in UPS’s business strategy, as the company looks to enhance profitability while managing operational costs.
Market Reaction
Despite these announcements, UPS shares showed little change, closing with a minor increase of 0.22%. The market response indicates a complex perception of the company’s future amid these drastic changes.
Overall, UPS’s commitment to cost-cutting and strategic realignment highlights its efforts to adapt in a competitive delivery market.
