UPS Automates Operations Amid Declining Revenue
United Parcel Service (UPS) is closing outdated facilities to adapt to reduced Amazon package volume, aiming to cut costs as it faces macroeconomic challenges and competition. This shift involves a transition to automated facilities, which can process packages at a 28% lower cost than traditional centers. In 2023, 57% of UPS packages were processed through these automated facilities, a figure expected to climb to 68% by 2026.
As part of its restructuring, UPS plans to eliminate 30,000 positions this year, following the layoff of 48,000 positions in 2025. The company intends to automate an additional 24 facilities by 2026, enhancing its low-cost operational model while aiming for long-term growth and improved profit margins. Analysts project UPS will report adjusted earnings per share of $7.12 in 2026 as the company navigates a changing logistics landscape.
