When Carol Tomé stepped into the CEO role at UPS in 2020, she made history twice over. She became the company’s first female chief executive and its first external hire for the top job in more than a century.
She arrived with serious financial credentials, having spent 18 years as Home Depot’s CFO, where she was known for managing multi-billion-dollar budgets with surgical precision. But her timing at UPS couldn’t have been tougher. The pandemic had hammered global supply chains, and the UPS network was straining under a flood of low-margin residential deliveries. Rather than chase volume at any cost, she made a counterintuitive call that would define her legacy: “Better, Not Bigger.” This strategy shifted the corporate focus from market share to profit margins, a pivot that was fully realized as the company moved into 2026.
According to UPS’s latest financial disclosures, the numbers have begun to reflect the success of this discipline. In 2025, UPS posted $88.7 billion in revenue with an operating profit of $7.9 billion, even as it intentionally shed lower-value business. By zeroing in on lucrative shipping sectors rather than residential bulk, Tomé built a framework centered on network efficiency that forced competitors across the transportation industry to rethink their e-commerce strategies.
Engineering a High-Yield Future
The Amazon Glide-Down
Under the “Better, Not Bigger” philosophy, UPS intentionally reduced its historical reliance on high-volume, low-margin residential deliveries. The boldest move was the systematic reduction of business from its largest customer: Amazon.
During the Q4 2024 earnings call, Tomé confirmed an “accelerated glide-down” plan to reduce Amazon’s volume by more than 50% by the second half of 2026. This reduction, occurring five times faster than previous efforts, removes a million pieces per day from the network. While this initially impacts total revenue, it frees up significant capacity for higher-yielding shipments from small- and medium-sized businesses (SMBs). In 2025, while total volume dipped, revenue per piece increased by 6.5%, proving that the shift toward business-to-business (B2B) accounts is driving higher margins for every item loaded onto a brown truck.
Capturing Healthcare Logistics
The “lost” Amazon volume is being strategically replaced by the Healthcare sector. Shipping temperature-sensitive prescription drugs and specialized surgical equipment requires strict handling protocols, and healthcare providers pay premium rates for that level of care.
UPS has invested heavily in dedicated medical distribution facilities equipped with advanced cold-chain technology. Tomé has described medical delivery as a reliable antidote to global economic uncertainty; these life-saving shipments are far more recession-resistan than retail apparel or consumer electronics. As of early 2026, UPS is on track to reach its $20 billion target in healthcare revenue, challenging giants like DHL in a specialized market worth roughly $80 billion globally.
| Strategy Metric | Pre-Tomé Era (Volume-Driven) | Tomé Era (Margin-Driven, 2026) |
| Primary Focus | Maximizing residential volume | Maximizing revenue per package |
| Amazon Dependency | High reliance (13%+ of revenue) | ~5-6% of revenue (est. post-glide-down) |
| Key Growth Sector | General retail and B2C | Healthcare and SMBs (B2B) |
| Labor Approach | Rapid headcount expansion | Strategic buyouts and automation |
Union Negotiations and Workforce Shifts
The Teamsters Deal and Driver Buyouts
Managing a unionized workforce of nearly 500,000 during a corporate restructuring is no small feat. The 2023–2028 contract with the Teamsters balanced record wage increases with the company’s need for long-term labor cost visibility.
In early 2026, UPS launched a high-profile voluntary buyout program for full-time U.S. drivers. The offer included a $150,000 separation package, regardless of years of service, in addition to earned pension and healthcare benefits. While the program faced legal pushback from the Teamsters—who argued it violated job-growth promises—the buyouts represent a calculated effort to trim the highest-cost labor roles through attrition and voluntary exit rather than involuntary layoffs
Headcount and Automation
The process of “right-sizing” the physical network is well underway. As part of its Network of the Future initiative, UPS announced plans to close dozens of older facilities in 2026 and cut up to 30,000 operational positions. These manual sortation centers are being replaced by high-tech automated hubs where robotic processes package at far greater speed and lower unit cost.
Safety Across a Global Fleet
Transit Risks in 2026
Data shows that nearly a quarter of all fatal car accidents occur during the morning and evening rush hours. For the UPS workforce, this highlights a significant coverage gap: while professional drivers are protected by comprehensive policies during their shifts, a corporate employee who is hit while commuting to work typically can’t claim workers’ compensation. This distinction underscores the importance of the company’s broader safety culture, which aims to reduce road exposure for all staff through hybrid work models and optimized facility locations.
Modernizing Fleet Safety
To address these risks, UPS relies on ORION (On-Road Integrated Optimization and Navigation). This proprietary system calculates the most efficient routes using real-time weather and traffic data. A cornerstone of the system is the elimination of left-hand turns in the U.S. (right-hand in Europe), which reduces intersection accidents and saves millions of gallons of fuel annually.
- Advanced Telematics: Sensors monitor speed and braking patterns in real time.
- Defensive Driver Training: Simulator-based modules prepare drivers for high-risk scenarios before they hit live routes.
- Fatigue Management: Strict hours-of-service enforcement combats the risks of late-shift and rush-hour driving.
A Blueprint for Resilient Leadership
The changes Carol Tomé has implemented over the past few years amount to a masterclass in corporate reinvention. She took a volume-heavy, pandemic-strained giant and reshaped it into a profit-focused, safety-conscious engine.
Her willingness to make unpopular choices—slashing Amazon volume, closing facilities, and offering high-value labor buyouts—restructured the business model from the ground up. Rather than bending to short-term market pressure, she stayed locked in on long-term fiscal health. As UPS moves through the second half of 2026, it stands as a leaner, more resilient company, well-positioned for sustained profitability in the high-stakes world of global logistics.
