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Despite the UPS revenue declines in its fiscal Q4 2025, it was able to reduce expenses, in part due to layoffs and building closures in 2025. UPS plans to lay off up to 30,000 employees in its fiscal 2026.

United Parcel Service (UPS) revenue continued to decline in its fiscal Q4 2025 after having spiked during the COVID-19 pandemic.

Revenue fell year-over-year for both its fiscal Q4 and its full fiscal 2025. CEO Carol Tome told investors on the carrier’s year-end earnings call that UPS operated through “a very dynamic macro environment, including significant change in global trade policies and increasing geopolitical concerns” in 2025. However, she said it was also “a year of considerable progress.”

She listed accomplishments from the fiscal year, including:

  • Reaching a volume-reduction target.
  • Reducing Amazon’s volume in its network by about 1 million pieces per day.
  • Saving $3.5 billion through a network reconfiguration to improve efficiency.
  • Deploying automation in 57 buildings.

At the same time, UPS also closed 93 buildings in the U.S., changing its fulfillment strategy. In line with that, UPS plans to “reduce operational positions by up to 30,000.” In addition to the layoffs, UPS also plans to reduce its Amazon volume by another 1 million pieces per day in its fiscal 2026.

“Deliberately shrinking a network is a daunting task,” she told investors. “And our success was driven by disciplined planning and effective execution as well as the added flexibility and efficiency that’s coming from deploying state-of-the-art technology and automation across a smaller and nimbler network.”

UPS fulfills deliveries for online orders from more than 1,020 retailers in the Top 2000 Database. Those retailers combined for more than $806 billion in 2024 ecommerce sales, Digital Commerce 360 data shows. The database is Digital Commerce 360’s rankings and more of the largest online retailers in North America based on their annual ecommerce sales.

UPS revenue in Q4 and 2025

In Q4, UPS revenue reached $24.5 billion. That’s about a 3.2% decrease from $25.3 the prior year.

Of that total, UPS’ U.S. Domestic segment generated $16.8 billion in revenue, a 3.2% increase. The increase came as its average daily volume (ADV) declined 10.8% from the previous year. Revenue per piece increased 8.3% year over year. That was the carrier’s strongest Q4 revenue-per-piece growth rate in four years, according to chief financial officer Brian Dykes. He attributed that to increases in base rates and package characteristics.

Also in Q4, UPS’ U.S. Domestic expenses declined 3.3% year over year. He attributed that to UPS’ “actions to remove hours and operational positions to align with volume.”

UPS international revenue in Q4 increased 2.5% to reach $5 billion despite a decline in volume. Operating profit from UPS’ international segment was $908 million, down by $154 million year over year. Dykes attributed more than half of the decline to U.S. trade policy changes.

And in its fiscal 2025, UPS revenue was $88.6 billion. That followed back-to-back years of UPS revenue plateauing at $91 billion. It marks a continued decline since a spike during the COVID-19 pandemic.

Furthermore, it’s the first year since UPS’ fiscal 2020 that the carrier’s revenue did not reach $90 billion. Prior to the pandemic, UPS revenue had never reached reached $80 billion. UPS had laid off about 12,000 employees around the end of its fiscal 2023 as package volumes had sharply declined after the pandemic spike.

Tome noted that in the U.S., UPS revenue per parcel increased 7.1% year over year. It also increased the penetration of small- and medium-sized businesses (SMBs) using its network to 31.8%.

Revenue from its Roadie and Happy Returns subsidiaries increased 24% year over year in UPS’ fiscal 2025.

UPS package volume in Q4 and 2025

In its fiscal Q4, UPS’s average daily volume (ADV) declined year over year by 2.4 million pieces. That’s a 10.8%  year-over-year decrease. More than half of that decline is because of the reduction in Amazon volume.

It’s also from “deliberate actions to remove lower-yielding ecommerce volume” from UPS’ network, according to Dykes. Total ADV decreased 11.9%, which Dykes also attributed to the reduction in Amazon volume. Ground-based ADV also declined, falling 10.6% year over year.

Internationally, UPS ADV declined 4.7%. International domestic ADV decreased 3.5%. Dykes said on the export side, UPS ADV in Q4 decreased 5.8% year over year as a result of changes to the de minimis exemption in the U.S. Furthermore, U.S. imports in total declined 24.4% year over year, led by declines in volume from Canada, Mexico and China.

In Q4, UPS’s increase in SMBs reached its highest fourth-quarter penetration in company history, Dykes said.

As a percentage of total U.S. volume, Tome said, UPS grew B2B to 42.3% in 2025. That’s 2.5% year-over-year growth. UPS’ B2B ADV decreased 5.2% compared to the prior year’s Q4. Additionally, B2B represented 37.5% of U.S. volume, a 2.2% increase from the previous year. That was the highest Q4 B2B penetration in six years, according to Dykes.

UPS also expanded its U.S. operating margin in 2025 while its ADV declined 8.6% for its full fiscal 2025.

Tome said UPS plans to further automate its network in its current fiscal year. It expects to increase the percentage of U.S. volume it processes through automated facilities to 68% by the end of its fiscal 2026. That would be an increase from 66.5% at the end of its fiscal 2025.

And UPS used artificial intelligence (AI) to process about 90% of all its cross-border transactions digitally, according to Tome. In the U.S., it experienced quadruple the amount of daily customs entries in 2025 compared to 2024.

Also in 2025, UPS deployed its RFID labeling solution, which it calls Smart Package Smart Facility, in 5,500 UPS store locations. It installed RFID readers in all U.S. package cars as well, Tome said.

UPS relationship with the U.S. Postal Service (USPS)

Tome noted that in UPS’ fiscal Q4, it “formalized a new relationship” with the U.S. Postal Service to support last-mile delivery for the former’s “Ground Saver” product. Ground Saver refers to what UPS calls its “economy product.”

“Our new agreement improves the economics associated with this product while ensuring our service expectations are met,” according to Tome.

She said UPS has already begun to increase the flow of Ground Saver volume to USPS. It also will continue to do so over the next several months, she added.

“As in the past, we will use density matching technology to determine which economy packages will be delivered by UPS versus the USPS,” Tome said.

Check back for more earnings reports. Here’s last quarter’s update on UPS sales and revenue.

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