UPS plans to offer voluntary buyouts to unionized delivery drivers, marking the first time in its history that the company is doing so, as it aims to realign its workforce with the downsizing of its domestic ground network and Amazon business. The move follows management’s disclosure last April of intentions to eliminate 20,000 front-line positions as part of a broader effort to cut excess capacity and improve profits.
The company’s Network of the Future plan envisions closing 200 sortation centers over five years and increasing automation for handling packages. Package drivers will receive a generous financial package if they choose to leave UPS, on top of earned retirement benefits, including pension and healthcare.
However, the Teamsters union has expressed strong opposition to the buyout offer, saying it is an “illegal violation” of their national contract. The union had previously agreed upon a five-year contract with UPS in 2023, which includes obligations for the company to create 30,000 jobs under certain conditions. Teamster contracts do provide employer-paid healthcare benefits for employees who have worked for at least 30 years, but these benefits are not transferable to dependents.
UPS executives stated that they expect to save over $1.2 billion this year by eliminating 25 million operating hours across the workforce and reducing semi-variable costs by a similar amount through the reduction of 20,000 employees. The company’s voluntary severance plan has angered the union, which will continue to fight against the buyout offer and insist that UPS honor its contractual obligations.
Source: https://www.freightwaves.com/news/ups-drivers-to-receive-buyout-offer-as-company-shrinks-parcel-network