(NewsNation) — United Parcel Service is offering unionized drivers company buyouts for the first time in the company’s 117-year history, just months after UPS officials said they were prepared to cut 20,000 jobs as part of a cost-cutting measure.
Company officials cited an “unprecedented business landscape” for the offer of buyouts that would provide drivers the opportunity to receive what the UPS officials characterized as a “generous financial package” if union drivers chose to leave the company.
The financial package would be in addition to any retirement benefits earned, including pension and healthcare.
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“As we work through our network configuration, we remain steadfast in our commitment to providing our customers with the reliable, industry-leading service they expect from UPS,” the company said in a statement.
In response, UPS teamsters have called the buyout plan illegal and “a corporate scheme” that would violate the union’s national contract that protects an estimated 340,000 delivery workers.
A United Parcel Service delivery driver steers his truck, Friday, June 30, 2023, in the East Boston neighborhood of Boston. Frustrated by what he called an “appalling counterproposal” earlier this week, Teamsters General President Sean O’Brien, the head of the union representing 340,000 UPS workers, said a strike now appears inevitable and gave the shipping giant a Friday deadline to improve its offer. (AP Photo/Michael Dwyer)
Teamsters officials said that although the details of the buyout have not yet been announced, the plan would leave most drivers without quality health insurance if they retired through the buyout. The plan also undermines UPS’s commitment to create an additional 22,500 jobs, which Teamsters officials said was included in their current contract.
“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,” Teamsters General President Sean M. O’Brien said in a statement released by the union.
UPS Teamsters ratified a five-year contract with the company in 2023. In addition to committing to creating more than 22,000 permanent jobs for part-time employees, the contract also called for UPS to create an additional 7,500 full-time jobs over the final three years of the deal.
The company said it has approached Teamsters about the buyout proposal, but also said it remains committed to the contractual obligations agreed upon nearly two years ago.
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In addition to eliminating 20,000 front-line jobs, UPS’s optimization plan also includes closing 200 UPS sortation centers over the next five years and increasing automated package sorting, according to reports. The report indicated that package volumes have slowed between fewer imports because of President Donald Trump’s tariffs and a decision this month to reduce Amazon’s business by 50% because of unprofitability.
UPS currently employs around 490,000 people, 340,000 of which are represented by the union. The Daily Mail reported that the downsizing effort is part of a $3.5 billion cost-reduction effort for this year. The company is hoping to reach a 12% U.S. operational margin by 2026, the report said.
Teamsters said that UPS attempted to introduce buyouts at the executive level in 2020.
“Our members cannot be bought off and we will not allow them to be sold out,” O’Brien said. “The Teamsters are prepared to fight UPS on every front with every available resource to shut down this illegal buyout program.
“UPS needs to live up to the existing contract. They must honor their commitments, just as Teamsters do every day, reliably delivering packages to hundreds of millions of Americans. Profits are not more important than people, not at UPS or any other employer.”
