UPS announced the closure of four facilities: the Kinston, North Carolina center will shut down on January 13, 2026; the day‑sort operation in Wyoming, Michigan ends on January 20; the day‑sort operation in Montgomery, Alabama ends on February 23; and the Cadillac, Michigan center closes on February 27. These actions are part of the company’s “Efficiency Reimagined” initiative, which has already closed 93 buildings and cut 34,000 jobs in 2025.
The closures reduce UPS’s fixed‑cost footprint and free capacity for higher‑margin services. The company has already realized $2.2 billion in savings through the third quarter of 2025 and projects $3.5 billion in 2025, largely driven by automation and network reconfiguration.
The move also supports UPS’s strategy to cut its volume with Amazon by more than 50% by the second half of 2026, allowing the company to focus on higher‑value freight and supply‑chain solutions.
CEO Carol Tomé said the closures are part of the most significant strategic shift in UPS’s history, designed to deliver long‑term value while maintaining service levels. She emphasized that the company is working to mitigate employment impacts by offering opportunities in other locations.
The closures come as UPS reports a 12% domestic operating‑margin target for Q4 2026, following a 10.8% margin for the full year 2025. Guidance for Q4 2025 expects an operating margin of 11.0‑11.5%, reflecting confidence in the efficiency gains.
Analysts note that the closures, while reducing capacity, are expected to improve profitability by shifting the mix toward higher‑margin segments such as U.S. domestic and international supply‑chain solutions, offsetting the short‑term impact on local employment.
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