The announcement comes on the back of strong holiday-season results, with UPS beating Wall Street expectations and forecasting a surprise increase in annual revenue a rare bright spot in a year marked by cost cutting and tough decisions.

UPS has been steadily stepping away from low profit deliveries, especially those tied to Amazon, its largest customer and an increasingly fierce rival. Last year, the company openly described that business as dragging down margins, signaling a clear shift in strategy.

Chief Financial Officer Brian Dykes said the latest workforce reduction will happen mostly through attrition, meaning jobs will fade away as workers leave. UPS also expects to offer another voluntary separation program for full-time drivers, easing the impact rather than forcing abrupt exits.

Despite the upbeat earnings, investors remained cautious. UPS shares slipped about 1% in premarket trading, reflecting lingering concerns over shrinking volumes and a changing delivery landscape.

The company is also dealing with headwinds after the end of U.S. ‘de minimis’ rules, which had allowed low value e-commerce shipments to enter duty-free. That shift has cooled some international shipping demand, adding pressure to UPS’s core business.

In 2025 alone, UPS cut 48,000 jobs, closed 93 facilities, and rolled out driver buyouts, all part of a broader effort to save roughly $3 billion by 2026.

UPS also reported a $137 million non cash charge related to retiring its MD 11 aircraft fleet, following a deadly crash in November. The company said the fleet’s retirement was completed in the fourth quarter.

Looking ahead, UPS expects 2026 revenue of $89.7 billion, up from $88.7 billion last year and well above analyst forecasts. It also projects an adjusted operating margin of 9.6%, signaling steady progress in its turnaround.

Analysts say pricing strength has been doing much of the heavy lifting. ‘UPS delivered another quarterly beat,’ said Evercore ISI analyst Jonathan Chappell, pointing to stronger than expected revenue per package in both domestic and international markets.

During the critical holiday shipping season, UPS reported fourth quarter revenue of $24.5 billion, topping expectations. While package volumes dipped, revenue per piece climbed sharply, rising 8.3% in the U.S. and 7.1% internationally as the company leaned into premium, higher value shipments.

On an adjusted basis, UPS earned $2.38 per share, comfortably ahead of estimates. The message from UPS is clear: fewer packages, better pricing, leaner operations and a long road toward a more profitable future.