UPS shrinks its Amazon business to chase profit

Overview

Updated Jul 28

UPS spent 18 months firing its biggest customer. On July 28, 2026, the numbers showed why. Revenue hit $22.83 billion and adjusted profit reached $1.76 per share, both above what Wall Street expected. The company raised its full-year outlook and said it was back to growing.

The turn matters because UPS chose it. Amazon was UPS's largest customer but one of its least profitable. So UPS decided to cut Amazon's delivery volume by more than half, close facilities, and cut tens of thousands of jobs. Q2 is the first clean read on whether trading volume for margin actually works.

Why it matters

UPS handles a big share of U.S. parcels, so its choice to prize profit over volume changes shipping costs and jobs across the delivery economy.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

$22.83B

Q2 2026 revenue

Above the roughly $21.8 billion analysts expected.

$1.76

Adjusted earnings per share

Beat the $1.66 consensus estimate by 10 cents.

$91.2B

Raised full-year revenue outlook

New 2026 guidance, up from prior forecasts.

50%+

Amazon volume cut

Planned reduction in Amazon packages by mid-2026.

~30,000

Jobs cut in 2026

On top of roughly 48,000 cut in 2025.

$3.5B

2025 cost savings

From network changes and the Efficiency Reimagined program.

Voices

Curated perspectives — historical figures and your fellow readers.

Ever wondered what historical figures would say about today's headlines?

People Involved

Carol B. Tomé

Chief Executive Officer, UPS

Leading the Amazon glide-down and network restructuring

Organizations Involved

United Parcel Service (UPS)

Logistics and Delivery Company

Restructuring its network and customer mix

UPS is one of the largest parcel carriers in the world and a widely watched gauge of U.S. goods movement.

Timeline

January 2025 July 2026

4 events Latest: July 28th, 2026 · 2 months ago

Tap a bar to jump to that date

July 2026
UPS beats and raises outlook
Latest Earnings

Q2 revenue of $22.83 billion and adjusted EPS of $1.76 top estimates. UPS lifts full-year guidance to about $91.2 billion in revenue and $7.22 in adjusted EPS. Shares rise about 1.8% premarket.
July 28th, 2026 • Before market open
April 2026
Amazon glide-down passes halfway
Operations

UPS reports cutting about 500,000 Amazon pieces a day in Q1, keeping the mid-2026 target on track.
April 1st, 2026
December 2025
First year of cuts lands
Restructuring

UPS ends 2025 having cut roughly 48,000 jobs and booked $3.5 billion in savings from network changes.
December 31st, 2025
January 2025
UPS moves to shrink its Amazon business
Strategy

On its Q4 2024 call, UPS says it will cut Amazon delivery volume by more than 50% by mid-2026 and launch a savings program called Efficiency Reimagined.
January 30th, 2025

Scenarios

UPS finishes the Amazon glide-down and holds its raised outlook

Likely Resolves by Feb 15, 2027

Discussed by: CNBC, FreightWaves, Supply Chain Dive

UPS completes the 50%-plus Amazon volume cut by mid-2026 as planned and delivers full-year results at or above the raised guidance. Higher revenue per package and cost savings offset the lost volume. The stock recovers ground it lost in 2025 as investors accept that a smaller, more profitable network was the right trade.

Weak demand or tariffs force UPS to cut its outlook again

Possible Resolves by Feb 15, 2027

Discussed by: Zacks, 24/7 Wall St., Investing.com

Trade and tariff uncertainty, higher fuel costs, or softer consumer shipping pull volumes below plan in the second half. With less Amazon volume as a cushion, UPS trims its guidance or misses on a later quarter. The margin gains from restructuring get eaten by a weaker freight environment, and the stock gives back its post-earnings gain.

UPS extends the strategy with new deep cost cuts or an acquisition

Possible Resolves by Jul 31, 2027

Discussed by: FreightWaves, Supply Chain Dive

With the Amazon glide-down nearly done, UPS looks for the next lever. That could mean a fresh round of facility closures and job cuts, a large acquisition in healthcare logistics or freight, or a new automation push. The company signals that restructuring is a continuing program, not a one-time reset tied to Amazon.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

August 1997

UPS pilots strike over network changes (1997)

About 185,000 Teamsters walked off the job at UPS for 15 days, mostly over the company's use of part-time workers. The strike halted much of UPS's package flow and forced a national spotlight on how the network is staffed.

Then

UPS lost an estimated $600 million and had to convert thousands of part-time jobs to full-time under a new contract.

Now

Labor terms became a lasting constraint on how quickly UPS could reshape its workforce and network.

Why this matters now

Today's restructuring cuts tens of thousands of jobs, but UPS says it is using attrition and voluntary buyouts, not forced layoffs. The 1997 history explains why the company is cutting carefully rather than fast.

August 2019

FedEx ends its Amazon ground contract (2019)

FedEx chose not to renew its U.S. ground-delivery contract with Amazon, walking away from its own large customer. FedEx argued Amazon was becoming a competitor building its own delivery arm, and that the volume was not worth the strategic risk.

Then

FedEx lost the revenue and took market questions about the decision. Amazon shifted the volume to its growing in-house network.

Now

Amazon built one of the largest delivery operations in the country, validating FedEx's read that the relationship was risky rather than durable.

Why this matters now

UPS is making the same bet FedEx made, but larger and slower: treat Amazon as low-value volume and give it up on purpose. It shows the choice is a known playbook, not a panic move.