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UPS to Shutter 27 More Facilities as It Pushes Profit‑First Pivot

The network cutbacks aim to lift margins by shifting capacity from low‑yield Amazon parcels to higher‑paying SMB, B2B, healthcare shipments.

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UPS is closing facilities and cutting costs to resize its network for lower volume, with the goal of protecting margins in a business with high fixed costs.
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Overview

  • UPS will close 27 additional parcel facilities in 2026, with most of the shutdowns planned for the second quarter.
  • The company closed 23 buildings in the first quarter and now targets about 50 closures this year with roughly 30,000 job cuts and 25 million labor hours removed.
  • Management said it remains on track to eliminate $3 billion in structural costs in 2026 through consolidation, automation, and route redesign.
  • UPS is dialing back Amazon work after cutting 500,000 packages per day in the first quarter and expects to reach about 2 million per day by mid‑year, which it said equals roughly $5 billion in revenue.
  • First‑quarter results showed pressure with $21.2 billion in revenue, $1.07 in adjusted EPS, and about a 6.2% adjusted operating margin, while leaders reaffirmed a late‑2026 margin recovery toward roughly 9.6%.