UPS Shares Fell More than 14% after Cutting Deliveries for Amazon in Half

Shares of United Parcel Service fell more than 14% in premarket trading after the delivery giant said it had reached an agreement with Amazon, its largest customer, to “reduce its volume by more than 50% by the second half of 2026.” 

UPS also said it is launching a multi-year initiative to cut costs by $1 billion.

Sales volumes will drop significantly as Amazon cuts shipments, but higher profit margins will come from the shift, according to the company’s CFO Brian Dykes. In addition, the company is redesigning its delivery network and implementing efficiency measures, an initiative that is set to cut costs by about $1 billion.

“We are making business and operational changes that, combined with the fundamental changes we have already made, will put us on track to become a more profitable, leaner, differentiated UPS that grows in the best parts of the market,” CEO Carol Tome said in the fourth-quarter 2024 earnings call.