UPS has extended the deadline for van drivers to apply for a buyout package by two weeks, an indication that the program didn’t meet its target for eliminating jobs.
The integrated parcel carrier initially gave drivers until July 31 to apply for the voluntary separation offer, but the Teamsters union posted on its Facebook page on Friday that “the package giant quietly extended the deadline for its devious driver voluntary severance plan.” A spokesperson for the union declined to provide details, but an individual at a local Teamsters office on the West Coast said UPS (NYSE: UPS) is giving delivery drivers until Aug. 14 to take the buyout.
The person is not authorized to speak with the media and is not being identified to avoid any employer repercussions.
UPS CEO Carol Tomé said on the company’s July 29 earnings conference call that the buyout offer has generated “a lot of interest” so far, but the company has not announced how many people have signed up and whether the package is over or undersubscribed. A UPS spokesperson declined to provide any update on the situation.
About 85% of UPS drivers are at the top end of the pay scale. Those who have 25 to 40 years of service would be the most likely candidates to accept the buyout package, Nando Cesarone, president of the U.S. region and UPS Airlines, told analysts on the call.
UPS is offering $1,800 per year of service, with a minimum payout of $10,000. A driver with 27 years of experience would receive a $48,600 buyout, according to the offer sheet.
It’s unclear if the delay in achieving the job-reduction target will change the timing of the separation dates.
Applicants were told they will be considered for separation dates between Aug. 31 and Oct. 31, depending on the local needs. If the number of applications exceeds eliminated positions, approvals will be granted in order of seniority. Additional applications may be considered for separation dates between Feb. 1 and March 31. The financial package is in addition to earned retirement benefits, including pension and healthcare.
The Teamsters union has vehemently opposed UPS’s buyout plan as a violation of its 2023 master contract, which obligates UPS to create about 30,000 full-time jobs. Union leaders have urged members to decline the voluntary separation package.
The Teamsters argue the separation program violates the union contract because it wasn’t negotiated and any program that changes the terms of employment, such as compensation and separation, must be bargained with the union. Seniority order for buyouts also requires union approval.
Equally important, is that the union considers the buyout as too low, amounting to about a week’s pay per year served.
The UPS buyout program, announced July, is connected to a huge network reconfiguration that aims to close 200 domestic package sortation centers over five years, invest in more automation and consolidate volumes in more efficient facilities. The integrated parcel logistics giant earlier this year announced plans to eliminate 20,000 front-line positions to better align the workforce with the smaller footprint and a planned 50% downsizing in business from Amazon, its largest customer.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
RELATED READING:
UPS posts tepid results amid tariff, restructuring challenges
Freight Fraud Symposium
Double brokering. AI deepfakes. Identity theft. Freight fraud is an existential threat to the industry. Get ahead of it.
Supply Chain AI Symposium
Past the hype. Join operators, founders, and enterprise leaders figuring out how to deploy AI in supply chain.
Future of Rail Symposium
Reshoring is rewriting freight demand. Join shippers, rail executives, and government officials to shape the next decade.
Double brokering. AI deepfakes. Identity theft. Freight fraud is an existential threat to the industry. Get ahead of it.
Rock & Roll Hall of Fame • Cleveland, OH Register NowPast the hype. Join operators, founders, and enterprise leaders figuring out how to deploy AI in supply chain.
The Old Post Office • Chicago, IL Register NowReshoring is rewriting freight demand. Join shippers, rail executives, and government officials to shape the next decade.
The Signal at Chattanooga Choo Choo • Chattanooga, TN Register Now