United Parcel Service (UPS), one of the world’s largest logistics companies, is preparing for a significant restructuring as it reduces its reliance on Amazon deliveries. According to media reports, UPS plans to eliminate up to 30,000 jobs globally in 2026 and shut down at least 24 facilities, marking one of the company’s most aggressive cost-cutting moves in recent years.
The job reductions represent roughly 6% of UPS’s global workforce, which currently stands at close to 490,000 employees worldwide. These cuts follow earlier layoffs, with the company having already removed around 20,000 roles last year and closed dozens of operational sites.
Why UPS Is Making These Changes
The restructuring is closely linked to UPS's decision to reduce package volumes from its largest customer, Amazon, significantly. While Amazon contributes substantial shipment volumes, UPS management has repeatedly highlighted that the business delivers lower profit margins, particularly in the US domestic market.
UPS has already reduced Amazon shipments by approximately one million packages per day, a trend expected to continue into 2026. The company previously indicated that Amazon-related volumes could be cut by more than half by the second half of next year.
Strategic Shift Towards Healthcare Logistics
Rather than focusing on high-volume, low-margin e-commerce deliveries, UPS is pivoting towards healthcare and specialised logistics, including the transportation of vaccines and medical supplies. This segment is viewed as more stable and profitable, especially amid growing global demand for healthcare distribution services.
UPS executives have noted that shrinking the network is a complex process, but one supported by automation, advanced technology, and more flexible operations across a smaller footprint.
Impact on Workers and Financial Performance
The company expects many of the job reductions to occur through natural attrition, with voluntary buyouts offered to full-time drivers. A large portion of UPS’s workforce is unionised, which means negotiations and workforce management will be closely watched.
Despite the restructuring, UPS recently reported strong fourth-quarter results, with revenue exceeding market expectations at approximately US$24.5 billion. However, its share price remained essentially unchanged following the announcement, suggesting investors had already priced in much of the restructuring.
What It Means for Investors
For investors, the move highlights how global logistics firms are adjusting to shifting e-commerce dynamics, margin pressures, and rising automation. While near-term job cuts may attract attention, the long-term focus is on improving profitability and operational efficiency.
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