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Key Points
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United Parcel Service (NYSE: UPS) has seen a 31% decline in stock value in 2025 and over 60% since early 2022.
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The company aims to save $3.5 billion through a cost-reduction initiative, which involves closing multiple facilities and reducing its workforce by approximately 20,000 employees.
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UPS’s average daily package volume in the U.S. fell by over 7% in Q2 2025, while its operating margin dropped to 7% from previous pandemic-era highs.
UPS’s recent financial struggles stem from a reduction in package deliveries as demand normalizes post-pandemic, along with increased competition, particularly from Amazon, which accounted for 11.8% of its revenue in 2024. The company has also terminated its acquisition of Estafeta in Mexico, leading to a downgrade from an analyst at BMO.
Despite these challenges, UPS is focusing on higher-margin sectors like healthcare and small-business freight. The company projects a consolidated operating margin increase from 7.7% to 8.6% in the next quarter, aided by its ongoing “Efficiency Reimagined” initiative.
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