Dive Brief:
- UPS has placed limitations on the scope of its latest driver buyout program and agreed not to pursue other severance programs for a period of time, the International Brotherhood of Teamsters union announced Sunday.
- Under an agreement with the Teamsters, UPS will be able to provide $150,000 buyout payments to a maximum of 7,500 drivers under its "Driver Choice Program." Previously, the carrier did not have any established limits on how many of its 105,000 eligible drivers could participate in the program, counsel for the Teamsters said earlier this year.
- “Lifelong Teamsters who have given so much of themselves to making UPS the king of parcel delivery will have the right of first refusal on any severance agreements," Teamsters General President Sean O'Brien said in the announcement. "Union seniority and the rights of all our members will be honored."
Dive Insight:
The deal marks a path forward for UPS to install its planned driver buyouts as part of a large-scale cost savings plan without invoking the ire of the Teamsters, which represent many of the carrier's U.S. employees. The company already deployed a similar separation program in 2025, with about 3,000 of the nearly 115,000 eligible drivers accepting that offer.
The Teamsters sued UPS in February over claims the latest buyout plan violated the union's labor contract, a case UPS eventually won. Although a judge cleared UPS to proceed with the buyouts, the initiative still faced opposition among some Teamsters locals, leading UPS to roll back the program across 13 states in the company's central region. Under the agreement announced Sunday, UPS said the buyout program will be offered on a nationwide basis, including in the central region.
"The DCP has been well received by our employees, with strong interest across the country," UPS said in a statement about the agreement. "Applications will be approved based on seniority and the needs of the business, as originally planned."
In addition to the buyout limitations, the Teamsters said UPS has agreed not to pursue or offer any other severance programs for the duration of its current national master contract with the union, which doesn't expire until July 31, 2028.
The agreement comes as UPS works to trim its U.S. employee ranks and rightsize its network amid a steep reduction in the number of deliveries it makes for Amazon. The company plans to cut up to 30,000 operational positions and close 24 buildings in the first half of 2026, EVP and CFO Brian Dykes said in January.
UPS said the Teamsters agreement "aligns with our objective to provide all U.S. drivers with options as we continue to reconfigure our network."
