UPS, one of the world’s largest package delivery companies, is offering employees a buyout option.
The buyout, called the “Driver Voluntary Separation Program” is available for consideration by full-time, U.S.-based drivers, and is the first time in the company’s history this sort of offer has been made to drivers, UPS said in a statement.
“As we navigate an unprecedented business landscape, we are executing the largest network reconfiguration in UPS history. For the first time ever, in recognition of these unique circumstances, we are offering our full-time U.S. drivers the opportunity to participate in a voluntary program that provides an opportunity to receive a generous financial package if they choose to leave UPS,” the company statement said.
The International Brotherhood of Teamsters, the union representing an estimated 340,000 UPS workers across the country, has called the voluntary offer to drivers “insulting” and alleges the program violates the terms agreed to in the 2023 labor contract.
Avral Thompson, President of Teamsters 89, was at the a UPS workers rally at 9:15 a.m. at UPS Worldport ahead of a potential strike on August 1st. July 18, 2023
At Teamsters Local 89, which represents UPS workers at Worldport and Centennial Hub in Louisville, President Avral Thompson told The Courier Journal he believes there will be roughly 800 eligible drivers for the buyout in the Louisville-area.
Here’s what we know about the UPS voluntary separation being offered to full-time drivers:
UPS workers rallied in front of the UPS Centennial Hub ahead of a potential strike on August 1st. July 18, 2023
In April, the shipping giant announced at its quarterly earnings report that it would undergo the “the largest network reconfiguration in UPS history.”
This announcement included cutting some 20,000 jobs across the global company and shuttering more than 70 facilities.
The company cited “new or increased tariffs” and “changes in general economic conditions in the U.S. or internationally” as the reason behind the cuts, USA Today previously reported.
Additionally, the first quarter report from UPS showcased a decline in company revenue when compared to the same quarter of 2024.
These cuts marked the second consecutive year of announced job cuts at the company known for its brown package cars. In January 2024, UPS announced it would reduce its worldwide workforce by 12,000 positions which would save the company roughly $1 billion, The Courier Journal previously reported.
UPS will report its second quarter results July 29. Analysts are expecting the earnings per share value to decrease by nearly 13%, according to NASDAQ.
A UPS cargo plane takes off at the UPS Worldport Air Hub in Louisville, Ky. Feb. 9, 2024
The voluntary separation offers eligible drivers who choose to accept the offer $1,800 per year of service at UPS, with a minimum payout of $10,000, the company said. Drivers who take the offer will also receive “any earned retirement benefits, including pension and healthcare.”
In one separation letter shared with The Courier Journal, a driver was offered more than $57,000.
“Our members cannot be bought off and we will not allow them to be sold out,” International Brotherhood of Teamsters President Sean O’Brien said in a statement. “The Teamsters are prepared to fight UPS on every front with every available resource to shut down this illegal buyout program.”
UPS is building a multi-million dollar aircraft hangar in Louisville to support its Worldport hub. July 11, 2023
One of the largest concerns the union has raised over the voluntary separation option is its legality.
The Teamsters claim the voluntary separation offers “directly violate” the job creation clause in the 2023 national agreement.
“UPS is trying to weasel its way out of creating good union jobs here in America by dangling insulting buyouts in front of Teamsters drivers. It is an illegal violation of our national contract,” O’Brien said in a statement. “UPS is obligated to establish tens of thousands of new full-time jobs under the agreement. But CEO Carol Tomé and UPS’s corporate managers are hoping that if they offer paltry severance packages to enough workers, no one will notice the company is setting the union’s contract on fire.”
UPS, however, states it is following the contract and is “on pace to meet or exceed our obligations to offer part-time employees the opportunity to fill at least 22,500 full-time job openings throughout UPS package operations.”
“UPS remains committed to the agreements we reached with the Teamsters in 2023 as part of our contract negotiations,” a spokesperson told The Courier Journal.
Contact business reporter Olivia Evans at oevans@courier-journal.com or on X, the platform formerly known as Twitter at @oliviamevans_.
