Sandy Springs-based UPS is making plans to offer buyouts to its drivers for the first time ever, prompting staunch opposition from the Teamsters union.
The potential buyouts for the drivers of its iconic brown package cars comes as UPS has announced plans to slash tens of thousands of management and other jobs and automate more of its business as it slogs through global trade tensions and the loss of business from what used to be its biggest customer — Amazon.
Just two years ago, UPS struck a landmark agreement with the Teamsters union that included pay boosts, promises to add air conditioning to package cars and agreements to hire thousands of full-time Teamsters members.
But on Thursday, UPS said in a written statement it is navigating “an unprecedented business 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,” UPS said.
It would include a “generous financial package if they choose to leave UPS,” in addition to any pension, health care or other retirement benefits they’ve already earned, the company 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,” UPS said.
In April, UPS said it planned to cut 20,000 jobs from its workforce of about 490,000, because of a cutback in its deliveries for Amazon and a larger push to make the network more “efficient.” The shipping giant also said it was closing 73 buildings by the end of June, with more to come.
“The world hasn’t been faced with such enormous potential impacts to trade in more than 100 years, so the only thing we’re certain of, is we don’t know which, if any, of our scenarios will play out,” CEO Carol Tomé told investors at the time.
Last year, UPS cut 12,000 people in its management ranks.
The company in April reported $21.5 billion in first quarter revenue, down 0.7% year over year. Its net income was nearly $1.2 billion, up 6.6% year over year. Its average daily U.S. domestic package volume declined to 17.4 million in the quarter from more than 18 million a year earlier.
UPS said Thursday it had approached the Teamsters — the union that represents its drivers — on the buyout plan. The company said it remains “committed to the agreements we reached in 2023, as part of our contract negotiations.”
In that labor contract, UPS pledged to create 7,500 full-time Teamster jobs at UPS, in addition to filling 22,500 open positions to allow more chances for part-timers to get full-time jobs.
The Teamsters said the buyout program, called a Driver Voluntary Severance Plan, would “directly violate” its contract protecting 340,000 delivery workers.
The union in a news release said its contracts ensure drivers who have worked for UPS for 30 years or more get employer-paid health care throughout retirement, “a strong union benefit that would not be guaranteed to all workers under UPS’s severance plan.”
Teamsters General Secretary-Treasurer Fred Zuckerman said drivers “should reject” the buyout.
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