What happened
United Parcel Service said this week that it has cut approximately 48,000 jobs so far in 2025 as part of an aggressive turnaround, including about 34,000 operational roles and roughly 14,000 management positions. UPS also disclosed it has closed daily operations at 93 leased and owned buildings through September 30 and is evaluating additional closures. Despite the restructuring, third‑quarter results beat Wall Street expectations, and UPS reported about $2.2 billion in year‑to‑date cost savings with a target of $3.5 billion for 2025.
Why UPS is cutting so deeply
The cuts follow a strategic shift to reduce lower‑margin e‑commerce flows—especially from Amazon. In January, UPS told investors it reached an agreement to lower Amazon‑related volume by more than 50% by the second half of 2026, prioritizing profitability over package count. That pivot foreshadowed April guidance to eliminate around 20,000 jobs and close more than 70 facilities by mid‑year; the latest disclosure shows the downsizing ultimately ran much larger as UPS reconfigured its U.S. network.
Should UPS drivers be worried?
It depends where you sit. UPS says most reductions are in operations and management tied to network consolidation and changing customer mix. The company’s Network Reconfiguration and Efficiency Reimagined programs are designed to match facilities and staffing to lower Amazon volumes and to focus on higher‑margin segments such as healthcare, small business, B2B and select cross‑border e‑commerce. Expect continued route, hub and shift adjustments as the network is resized.
- Package car and feeder drivers (UPS employees): With buildings and sorts shuttered, some work will shift or consolidate. Seniority rules and local bidding processes will govern many changes, but drivers in affected markets could see start‑time moves, new loops, or opportunities to transfer—alongside potential reductions in overtime where density falls. UPS has indicated the reconfiguration is ongoing into 2026.
- Owner‑operators and fleets hauling UPS freight via brokers: UPS sold its truckload brokerage unit, Coyote Logistics, to RXO; RXO now serves UPS’s brokered transportation needs under a long‑term contract. If you ran under Coyote in the UPS era, expect RXO to manage tenders and lane mix going forward. Network consolidation at UPS can still ripple into RXO’s demand patterns, bid calendars and lead times.
- Regional carriers near closed facilities: When a building closes, volumes are redirected to remaining hubs, which can lengthen linehaul, alter handoff windows and change yard congestion. Carriers should be ready for revised appointment times and different dwell dynamics as UPS optimizes hub footprints.
- Opportunities outside UPS: As UPS trims low‑margin e‑commerce, some parcels shift among competitors and marketplaces. UPS has highlighted adding business from platforms like Temu and Shein and insourcing more profitable small‑package flows; competitors and regional parcel players may also pick up displaced density, creating spot and contract opportunities for nimble fleets.
What to do now: Practical steps for drivers and fleet managers
- Monitor local notices closely: Stay on top of building‑specific updates, bid cycles and shift changes. Consolidations can be sudden; plan for schedule or domicile adjustments with minimal downtime.
- Validate lane profitability: If you haul UPS‑adjacent freight via RXO or other brokers, reprice lanes affected by longer stem miles or new sort times. Look for backhaul pairings into the surviving hubs to protect margins.
- Diversify customer mix: With UPS purposely lowering Amazon exposure, align your book toward B2B, healthcare and time‑definite freight where rates and dwell are typically better—and where UPS says it is leaning.
- Right‑size equipment and staffing: Peak season plans could look different with a smaller, more concentrated network. Cross‑train drivers for feeder and regional work, and scrutinize P&D versus linehaul allocations as density shifts between markets.
Bottom line
UPS’s 2025 cuts are real, large and tied to a deliberate pivot away from lower‑margin volume—especially Amazon freight—and toward a tighter, more profitable network. For UPS employees, the near‑term pain will show up as building closures, rebids and schedule reshuffles; for independent carriers, the ripple effects will be felt in which hubs remain, when freight moves, and which lanes pay. Staying agile on bids and capacity, and focusing on higher‑yield segments, will be the best defense—and the best opportunity—through 2026.
Sources Consulted: Associated Press; CNBC; Reuters; UPI; UPS Investor Relations.
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