UPS is reducing its reliance on low-margin Amazon packages, with plans to cut deliveries by over 50% by 2026. The move is impacting revenue, prompting UPS to close buildings and cut its workforce. However, revenue per package is increasing as UPS focuses on higher-margin opportunities.

In 2024, Amazon represented 11% of UPS’s revenue but accounted for 20-25% of U.S. network volume. UPS is reducing Amazon volume by 1 million pieces per day in 2025 and plans to cut another million in 2026. The company closed 93 U.S. buildings last year, saving $3.5 billion in costs.

UPS cut 48,000 jobs in 2025 and plans to eliminate another 30,000 in 2026, along with closing 24 more buildings. Despite a 10.8% decline in U.S. volume in Q4 2025 due to the Amazon plan, revenue per piece rose by 8.3%, and the adjusted operating margin improved.

The path forward for UPS involves navigating revenue declines from the Amazon plan and costs related to restructuring. The company expects an adjusted operating margin of 9.6% in 2026, down from 9.8% in 2025. Long-term strategies focus on revenue growth and cost reduction for margin expansion.

Investors have been wary of UPS as it transitions away from Amazon, but the company’s stock rose after beating Q4 expectations. While not on the Stock Advisor’s top 10 list, UPS is positioned for growth post-Amazon restructuring. Consider other investment opportunities for potential high returns.

Read more at Nasdaq: UPS Is Firing Its Biggest Customer — And Wall Street Finally Understands Why