UPS has informed the Teamsters union that it will withdraw its $150,000 buyout programme for package car and linehaul drivers in 13 central US states, following strong resistance from local union leaders.
The decision complicates the company’s broader effort to cut 30,000 jobs as it downsizes its network in response to lower parcel volumes.
The International Brotherhood of Teamsters, which represents around 340,000 drivers and package handlers, argues that the voluntary separation agreements violate the national contract signed in September 2023. The union says the programme undermines employment security guarantees and amounts to direct dealing between management and workers over changes to contractual terms. In February, a federal judge denied an attempt to block UPS from implementing the Driver Choice programme.
According to the Teamsters, UPS decided to pull the offer in 13 states after 37 local unions in the Central Region filed grievances through the contract’s approved process, demanding to be excluded from the programme.
The Central Region stretches from Nebraska to Ohio and includes more than 68,000 UPS employees. It is not clear how many of those workers are drivers, though warehouse employees make up the majority. The region operates under a supplemental rider to the national agreement, and the Teamsters say that supplement prevents UPS from directly offering incentive programmes that have not been voted on and approved by employees and the union.
Under Driver Choice, UPS offered a lump-sum payout of $150,000 regardless of seniority, in exchange for a driver resigning and agreeing never to work for the company again. Around 105,000 drivers had initially been eligible, though that figure will now be reduced after the programme’s withdrawal from the Central Region. UPS launched a similar incentive programme last fall, but that plan was less generous and based on tenure. Only 3,000 drivers accepted it.
In an emailed statement, UPS said it does not agree with the union’s position and believes the Driver Choice Programme complies with the contract. The company added that the programme has been well received by its US drivers elsewhere in the country.
UPS has not yet directly informed workers in the Central Region that the offer is being withdrawn, though that communication is expected soon. Employees who previously applied for voluntary separation will be told they are no longer eligible.
The company began informing package van and tractor-trailer drivers in late February and expects to finalise separation agreements by late April. Management has not disclosed how many drivers have accepted the offer so far, but chief financial officer Brian Dykes said earlier this month at a Raymond James investor conference that take-up rates had been encouraging.
For UPS, buyouts offer a way to accelerate planned job cuts because senior union workers are effectively protected by their job security. When positions are eliminated, less-tenured workers are the ones who leave, while drivers can often shift into warehouse roles while keeping their pay and benefits.
The Teamsters said grievances tied to the 2025 voluntary separation programme are due to be heard by an arbitrator in May.
UPS’s wider network restructuring includes the closure of nearly 120 facilities, the elimination of 64,000 full-time jobs and the reduction of 50 million operating hours over two years. Management has said the initiative is expected to deliver $3 billion in structural cost savings after the company decided to shed half of its Amazon business because it was not profitable.
