United Parcel Service (UPS) is set to undergo significant organizational changes as it prepares to cut 20,000 jobs and close 73 facilities by mid-2025. The logistics giant's decision is part of a broader strategy to streamline operations amid expectations of declining package volumes from its largest customer, Amazon. The Financial Times reports that UPS has reached an agreement with Amazon to reduce package delivery volumes by more than 50% by 2026.

These strategic adjustments come in response to shifting market dynamics, with UPS aiming to pivot towards more profitable segments. The company announced a reported net income of $1.2 billion on $21.5 billion in first-quarter revenue for 2025, which was slightly below the analysts' expectations. However, its adjusted earnings per share of $1.49 surpassed the anticipated $1.38. UPS forecasts its 2025 revenue at $89 billion, below the analyst projections of $94.88 billion, primarily due to the planned reduction in Amazon shipments, as noted by Reuters.

Additionally, UPS is focused on restructuring its U.S. domestic network by reducing its aircraft and vehicle fleets, generating $3.5 billion in cost savings for 2025. The restructuring efforts, while incurring $400–$600 million in expenses, reflect the company's commitment to optimizing profitability. Despite these initiatives, market reaction was mixed, with UPS shares dipping by 1% in pre-market trading following the announcements.