UPS has cut more jobs than expected in 2025 as the package delivery giant maneuvers through its network reconfiguration and seeks to make the most out of declining volumes.
The company says it has reduced its operational workforce by approximately 34,000 positions, more than initial estimates of 20,000 layoffs first announced in April. The courier also cut 14,000 additional management jobs, in line with previously unveiled projections.
Attrition in operational positions accelerated each month during the quarter, with the figure including the reduction from the voluntary driver buyout program established earlier this year. Nearly one-third of the operational reductions, or roughly 10,000 employees, occurred in September.
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The announcement, made as part of UPS’ third quarter earnings release, came the same morning logistics competitor Amazon revealed it would axe 14,000 corporate employees.
Alongside the cost cuts from the layoffs, an earnings beat and an upbeat fourth quarter guidance helped propel the stock more than 6 percent in Tuesday morning trading.
Revenue at UPS declined 3.7 percent to $21.4 billion on net income of $1.3 billion, or a $1.74 per share adjusted profit. Revenue came in ahead of expectations of $20.8 billion from analysts polled by LSEG, while adjusted earnings per share smashed forecasts of $1.30 per share.
For the fourth quarter, UPS expects revenue to be approximately $24 billion, down 2.8 percent from $25.3 billion last year. But adjusted operating margin is supposed to improve due to the cost cuts, with forecasts coming in at approximately 11 percent to 11.5 percent of sales. For the prior nine months of the year, this metric came in at 9 percent.
To shore up these margins, UPS is still trying to maximize revenue from its parcel network as volume declines.
Domestically, average daily volumes declined 12.3 percent to 16.2 million packages, sending revenue in the U.S. down 26 percent to $14.2 billion.
Amazon’s decoupling with UPS is one of the largest drivers of the volume decline, as the Atlanta-based delivery firm has sought to reduce handling the e-commerce giant’s packages by more than 50 percent by the second half of 2026.
That decision comes as UPS seeks to trim less profitable e-commerce volume from its network and drive higher revenue per package.
This “glide down” resulted in total year-over-year volume declines of 21.2 percent for Amazon packages in the third quarter, compared to 13 percent for the 2025 first half.
Amazon’s shifting relationship with UPS also was the main contributor to a 13.9 percent decline in average daily volumes shipped via air, according to UPS chief financial officer Brian Dykes.
Dykes said the fourth quarter, which includes the holiday season, will see a sequential increase in Amazon volumes “because everybody peaks.”
Internationally, UPS saw a lot more success, with average daily volumes increasing 4.8 percent to 3.3 million packages. Revenue on the international front jumped 5.9 percent to $4.7 billion.
Given the current geopolitical environment surrounding tariffs and the closure of the de minimis provision, the China-to-U.S. lane is still a major weak point for the company.
Normally UPS’ most profitable trade lane, average daily volumes from China to the U.S. declined 27.1 percent in the third quarter. The company expects further declines on the route in the fourth quarter.
As for the end of de minimis, UPS has endured criticism over the disposal of some packages that are missing information required to go through the overloaded customs clearance process.
CEO Carol Tomé shed light on the backlog the courier has faced.
“Back in March, we had 13,000 packages that came into the U.S. every day that required some sort of a dutiable clearance, and we handled that. About 21 percent was handled with technology, so cleared without any manual intervention,” Tomé said. “If you fast forward to September, 112,000 packages a day required some sort of dutiable clearance. Thank goodness we invested in technology, so we were able to clear 90 percent of those packages without any manual intervention, which is great.”
Tomé highlighted UPS’ swift response to the elimination of the duty-free trade exemption, saying the company upgraded its shipping systems to capture the expanded data requirements mandated by U.S. Customs and Border Protection.
To manage the increased volume and complexity, UPS also integrated agentic AI into its customs brokerage capabilities to help streamline the formal entry process.
According to Dykes, the cost to accommodate the shifts in trade policy totaled $60 million in the third quarter, and is expected to have a direct impact between $75 million and $100 million.
As UPS balances the new normal of global trade, it continues to fine tune its larger network, keeping plans to cut $3.5 billion in costs in 2025. Thus far, cost savings have reached approximately $2.2 billion, with the company having closed daily operations at 93 leased and owned buildings during the first nine months. There will be further closures and consolidation of buildings in the fourth quarter, according to Tomé.
The deployment of automation technologies within its warehouse has been another major imperative of the company’s “Network of the Future” efforts, with automated systems deployed in 35 of the company’s facilities over the past year.
In the fourth quarter, UPS anticipate 66 percent of its volume will move through automated processes, up from 63 percent during the same period last year.
