UPS is offering buyouts to delivery drivers for the first time in its 117-year history as it tries to reduce its workforce. This move is part of a plan to shrink its U.S. ground network and reduce its business with Amazon.
Back in April, UPS said it planned to cut 20,000 frontline jobs to save money and increase profits. The company is working on a project called "Network of the Future," which includes closing 200 sorting centers over five years and using more automation to handle packages. Many facilities have already been merged in the past year.
UPS said drivers who choose to leave will get a generous payout, in addition to the retirement benefits they’ve already earned, like pensions and healthcare. "We’re making the biggest changes ever to our delivery network,” UPS said, “and we need to adjust our workforce too.”
The number of packages being shipped is falling for several reasons, including tariffs from the Trump era that slowed down imports. UPS also chose to reduce its business with Amazon by 50% over 18 months because much of it wasn’t profitable.
The Teamsters union, which represents UPS drivers, is angry about the buyouts. They say UPS is supposed to create 30,000 new jobs under a five-year contract signed in August 2023, which helped avoid a major strike. The union is encouraging drivers to reject the buyout offer.
“UPS is trying to avoid creating good union jobs by offering weak buyouts,” said Teamsters President Sean O’Brien. “This goes against our contract. The company is trying to distract people from the fact that it’s breaking its promises. Our drivers work too hard to be treated like this.”
According to the union, long-time UPS drivers (those with 30+ years on the job) are promised employer-paid healthcare during retirement, but not all workers would get that under the new buyout plan. The contract also says UPS must promote 22,500 part-time workers to full-time jobs and add 7,500 new full-time roles.
UPS responded by saying it has talked to the Teamsters about this and still plans to follow the 2023 agreement.
The Teamsters recently accused UPS of not following through on other promises too, like hiring enough workers and adding 28,000 air-conditioned trucks to protect drivers from heat. The union asked for updates on job openings and the progress of adding these vehicles. They gave UPS until July 1 to respond, but the company asked for more time.
“Our members can’t be bought off,” said O’Brien. “We won’t let this illegal buyout go forward. UPS needs to keep its word, just like our drivers do every day, delivering packages across the country. People matter more than profits at UPS or anywhere else.”
UPS said earlier this year it expects to save $1.2 billion in 2025 by cutting 25 million work hours. Cutting 20,000 jobs is expected to bring in similar savings.