Shipping giant UPS plans to offer voluntary severance packages to some of its full-time U.S. drivers.
On July 3, the International Brotherhood of Teamsters, a trade union that represents many of the drivers, announced that United Parcel Service Inc. will issue a plan later this month offering “cash to drivers to initiate early retirement or quit their job.”
In a statement shared with The Epoch Times, UPS confirmed that buyout packages will be offered. The company said it is facing an “unprecedented” business landscape and is attempting to simultaneously reconfigure its freight network while adjusting to a shifting trade landscape.
“For the first time ever, in recognition of these unique circumstances, we are looking to offer our full-time U.S. drivers the opportunity to participate in a voluntary program that would provide an opportunity to receive a generous financial package if they choose to leave UPS,” the statement said. “Each driver would have the ability to decide if this voluntary program is beneficial to their family and the plans they have for their future.”
The buyout program, identified by the union as the Driver Voluntary Severance Plan, would allow eligible drivers to leave the company in exchange for a cash buyout. The Teamsters called that plan illegal, saying the severance offer would violate the terms of the five-year collective bargaining agreement ratified in August 2023.
Under the terms of that agreement, the Teamsters said, UPS is committed to creating at least 22,500 more jobs. According to UPS, 333,000 of its employees are Teamsters.
“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,” Teamsters General President Sean M. O’Brien said in a statement.
In the July 3 statement, the Teamsters said the proposed buyouts could leave some retiring drivers without critical benefits, such as company-funded health insurance. Under the current contract, drivers with 30 years of service are entitled to employer-paid health care throughout retirement.
In its statement, UPS said it intends to comply with its contractual obligations. Furthermore, it said, the buyout offer “is in addition to any earned retirement benefits, including pension and healthcare.”
The labor group also raised concerns that UPS may be shifting delivery work to nonunion affiliates, further undermining the spirit of the national agreement.
In January, UPS CEO Carol Tomé announced that the company would begin to cut back on the number of deliveries it makes for online retailer Amazon.com Inc. in an effort to pursue more profitable clients.
In April, during its quarterly earnings call, UPS executives said the company will undergo a massive transition due to tariffs announced by President Donald Trump. As part of that transformation, UPS CFO Brian Dykes told investors, the company will cut about 20,000 jobs by the end of 2025.
“The environment may be uncertain, but with our actions, we will emerge as an even stronger, more nimble UPS,” Tomé said in April.
