Why UPS is cutting 30,000 jobs and retiring its MD-11 cargo fleet.

United Parcel Service (UPS) announced plans to eliminate up to 30,000 operational positions in 2026. This move is part of an ongoing strategy to shift away from lower-profit business.

This major workforce reduction follows 48,000 job cuts made in 2025. UPS also plans to close 24 facilities in the first half of 2026. The company is aiming for $3 billion in cost savings through these changes.

The Amazon "Glide-Down" Strategy

The job cuts are directly linked to the Amazon volume reduction plan. UPS is in the final six months of its "Amazon accelerated glide down plan." The company intends to reduce Amazon's daily volume by another one million pieces in 2026.

CEO Carol Tome noted the goal is a more profitable, agile, and differentiated UPS. The business with the online retailer was called "extraordinarily dilutive" to margins. The company is reconfiguring its network to handle less volume.

• Volume Reduction: One million fewer Amazon pieces per day in 2025, and another one million targeted for 2026.
• Job Impact: Cuts will be achieved through attrition and a second voluntary separation program for full-time drivers. Layoffs are not planned.
• Financial Impact: UPS expects revenue to fall in the first half of 2026. It should rise sequentially in the second half.

Air Cargo Fleet Modernization

In a separate but related move, UPS confirmed the accelerated retirement of its entire McDonnell Douglas MD-11 cargo fleet. The phaseout was completed in the fourth quarter of 2025. This acceleration follows a fatal crash of a UPS Airlines Flight 2976 in November 2025.

The MD-11 fleet, which comprised over two dozen cargo jets, is being replaced. UPS is substituting the capacity with new, more efficient Boeing 767 freighters. The company plans to take delivery of 15 new Boeing 767s in 2026.

• Aviation Safety: The accelerated retirement highlights the industry's focus on fleet modernization.
• Financial Charge: UPS recorded a non-cash, after-tax charge of $137 million. This charge was related to the MD-11 fleet write-off.

Q4 Earnings and Industry Shift

The announcements came during the company’s strong fourth-quarter 2025 earnings report. Consolidated revenue was $24.5 billion, beating Wall Street estimates. Adjusted earnings per share were $2.38.

This financial performance underscores the success of the air cargo industry shift. The focus is now on higher-margin shipments. UPS's U.S. domestic segment saw an 8.3% rise in revenue per piece. This occurred despite a 10.8% drop in average daily volume. The company is also working to stabilize volumes from other e-commerce retailers.

Key Takeaways for Aviation Stakeholders:

• 30,000 Jobs: UPS is reducing its workforce to align with lower volume and increased automation.
• MD-11 Retirement: The accelerated grounding of the McDonnell Douglas MD-11 fleet impacts global air cargo capacity.
• Boeing 767 Orders: The replacement with Boeing 767 freighters signals a commitment to modern, twin-engine aircraft.
• Margin Focus: The strategic move away from low-margin e-commerce business is a major trend in the logistics sector.

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