UPS Shares Plunge 14% As Company Goes Full Savage Cutting Ties With Amazon (Their #1 Customer?!)

UPS shares just had their worst day since forever (okay, 2008, but still), falling a soul-crushing 14% on Thursday. Why? The shipping giant decided to call it quits on half its business with Amazon—(their largest customer LOL). Investors, understandably, were not here for it. 

(Source: Giphy) 

Now with that said, UPS’s relationship with Amazon has always been a little… complicated. Sure, there was volume—lots of it—but according to CEO Carol Tomé, the margins on Amazon’s business were “very dilutive” to UPS’s U.S. operations. Translation: Amazon was that high-maintenance client who demands premium service while barely covering costs.

So, when the contract came up for renewal, UPS didn’t just renegotiate—it decided to “accelerate the glide down” of Amazon deliveries. Tomé went full breakup mode, telling investors this “deliberate” move will make UPS a leaner, more profitable company. Basically, UPS is Marie Kondo-ing its customer base, ditching the clutter (read: Amazon) to focus on “the best parts of the market” like healthcare, small businesses, and B2B shipments.

(Source: CNBC) 

The market, however, didn’t find this news particularly joyful. UPS’s full-year revenue guidance for 2025 came in at $89 billion, down from $91 billion in 2024. The cherry on top? A weaker-than-expected operating margin forecast of 10.8%. For a company that’s been trying to shake off a multi-year freight recession, this feels like yet another uphill battle.

And just to twist the knife, UPS also announced it’s cutting ties with USPS for SurePost deliveries, further lowering its volume. These moves might make sense on paper—less volume, higher profit per package—but Wall Street hates uncertainty almost as much as it hates weak guidance.

(Source: IBD) 

Amazon, for its part, is acting like it couldn’t care less. A spokesperson shrugged off the announcement, saying UPS asked for the volume reduction “due to their operational needs.” Oh, and just to rub salt in the wound, Amazon even offered to increase its volume with UPS before this whole breakup—all while still quietly building its own logistic empire, cutting out the middlemen (FedEx and USPS) wherever possible. So again, Amazon really couldn’t care less. 

The silver lining to all of this? UPS says it’ll save at least $1 billion by streamlining its operations, and it’s leaning into more profitable sectors like healthcare and international shipping. Plus, the company’s domestic and international revenues rose 2% and 7%, respectively, in the fourth quarter.

(Source: Giphy) 

But these moves are going to take time to pay off. Cutting Amazon—no matte how toxic—means lower overall volume, and the market is already pricing in the short-term pain. UPS is essentially hitting the reset button on its business model, and investors are left wondering how long it’ll take for the company to prove this was the right call.

So yeah, it’s definitely interesting over in UPS land… which is understandable as to why investors yeeted shares -14%. And while CEO Carol Tomé is promising a more “profitable, agile, and differentiated” UPS, the market isn’t buying the vision just yet. For now, the company’s going to have to hustle to convince investors that ditching its biggest customer is actually a long-term win—and not a logistical clusterf**k waiting to happen.

(Source: Giphy) 

In the meantime, keep an eye on UPS (especially you “BTFD” degenerates) and place your bets accordingly. As always, stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in Amazon as mentioned in the article.