UPS Eliminates 48,000 Jobs While Working Toward $3.5 Billion Cost-Cutting Target

Santa will have a much smaller logistics network at his disposal this Christmas. United Parcel Service said Tuesday that it cut 48,000 jobs in the first nine months of the year.

UPS made the disclosure and expounded on its ongoing turnaround as it reported third-quarter earnings of $1.3 billion and revenue of $21.4 billion, both of which represented declines but topped Wall Street’s expectations.

High Yields Come in All Packages

UPS has been led by Carol Tomé, the Atlanta-based multinational shipping giant’s first outsider CEO, since 2020. As you can imagine, that was the most roller-coaster possible year to take over a courier company. Early in her tenure, UPS shares were turbocharged by the surge in package shipping during the pandemic. However, they’ve been in an extended slump since the spring of 2022, including a 23.6% loss since January, as volumes have sunk with the waning of the pandemic.

This year, of course, delivered a one-two punch: President Donald Trump’s tariffs have eroded UPS’ business. Packages sent to the US from China fell 30% year over year in the third quarter, reflecting the closure of a loophole that had allowed duty-free shipments below $800. To right the ship(ment), Tomé has pursued a $3.5 billion cost-reduction plan. That includes not only eliminating jobs, but also trimming money-losing businesses. One of the latter, Tomé says, is delivering packages for Amazon. UPS plans to cut its Amazon shipping volumes 50% by the second half of 2026. In the third quarter, it achieved a 21% reduction in Amazon parcel deliveries compared with last year (nevertheless, Amazon generated nearly 12% of revenue in 2024). Meanwhile, management has been resolute in conveying to markets its willingness to accelerate turnaround efforts:

• In April, UPS said it was planning to cut 20,000 jobs, which made Tuesday’s 48,000 figure especially eye-popping. Management highlighted how automation is improving its operations, and said it is hiring fewer seasonal workers for the holiday period.
• UPS said it has already realized $2.2 billion worth of year-over-year cost savings as of September 30. The company plans to meet its $3.5 billion year-over-year target by the end of the year.

Means to a Dividend: UPS stock’s very high dividend yield of 7.4%, more than three times the S&P 500 average of 2.3%, has raised concerns that payouts to shareholders are eating up too much profit and might therefore be lowered. Executives have signaled that their plans don’t include a dividend cut, however, and UPS rose 8% yesterday as investors shuffled in with dreams of a little passive income.