In 2025, United Parcel Service (UPS) and Amazon.com reached an agreement to reduce UPS’s deliveries for Amazon by over 50% by June 2026. This shift comes as UPS CEO Carol Tomé indicated that Amazon was not among the company’s most profitable customers, prompting a strategic realignment towards more lucrative sectors such as small businesses and healthcare logistics.
As part of this restructuring, UPS plans to cut up to 30,000 operational jobs and close multiple facilities by 2026, aiming to reduce 25 million work hours that have stemmed from declining Amazon shipments. UPS has already closed 93 buildings in 2025 and selected 24 more for closure in the first half of 2026, with further reductions anticipated. These measures are projected to achieve $3 billion in savings as the company pivots away from low-margin volumes.
In 2025, FedEx also implemented cost-cutting initiatives, generating $1.8 billion in savings, as it navigates a challenging demand environment. Both companies are adjusting their operational strategies in response to declining e-commerce shipment volumes.
