UPS to cut 30,000 more jobs in 2026, ramp up automation as Amazon tie-up winds down
UPS, the world’s largest parcel delivery company, has announced plans to cut up to 30,000 jobs in 2026, a move that signals a major shift in how the company does business—especially with Amazon.
If you’re wondering why a profitable company would make such a big decision, here’s the simple explanation.
Why UPS Is Cutting Jobs Now
UPS says the job reductions are part of a broader strategy to scale back deliveries for Amazon, its biggest customer. According to the company, Amazon shipments are “extraordinarily dilutive” to profit margins—meaning they generate high volume but relatively low profit.
Instead of abrupt layoffs, UPS plans to manage these cuts by:
- Offering buyouts to full-time drivers
- Not replacing employees who leave voluntarily
This approach is meant to soften the impact while allowing the company to restructure gradually.
Strong Earnings, But a Strategic Reset
Despite the job cuts, UPS is far from struggling financially. The company reported $24.5 billion in revenue for the final quarter of last year and surprised markets by forecasting $89.7 billion in revenue for 2026.
So why the cuts?
Because UPS is shifting focus—from volume-driven business to higher-margin customers, especially in sectors like healthcare and specialized logistics, where reliability and precision matter more than speed alone.
Moving Away from Amazon: A Long-Term Plan
This isn’t a sudden decision. Back in 2025, UPS announced a turnaround plan aimed at reducing its dependency on Amazon.
Here’s what has already happened:
- 48,000 jobs cut in 2025
- 93 facilities closed last year
- 24 more facilities set to close in the first half of 2026
CEO Carol Tomé explained that UPS is now in the final phase of its Amazon reduction strategy, planning to remove another one million packages per day from its network this year while reconfiguring operations for better efficiency.
What This Means for UPS Employees
According to UPS’s 2024 annual report, the company employs around 490,000 people worldwide, including nearly 78,000 management staff. Many of its frontline workers are unionized, which adds another layer of complexity to workforce changes.
While buyouts and attrition may reduce immediate disruption, this announcement still raises concerns about job security across the logistics sector.
Fleet Changes After Tragedy
In another major update, UPS confirmed it is retiring its MD-11 cargo aircraft fleet. These planes—about 9% of its total fleet—were grounded after a fatal crash in Louisville, Kentucky, in November.
The decision marks the end of an era and reflects UPS’s broader effort to modernize operations and improve safety.
How Did the Market React?
Investors responded calmly. UPS shares closed slightly higher in New York trading, suggesting that markets view the restructuring as a positive long-term move rather than a sign of trouble.
The Bigger Picture
UPS’s decision highlights a growing trend in global logistics: profitability over volume. As delivery networks become more complex and costs rise, companies are rethinking partnerships that don’t deliver sustainable returns—even when those partners are as big as Amazon.
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