Teamsters call the move illegal as UPS seeks to cut 20,000 jobs
UPS has announced voluntary buyouts for unionized delivery drivers for the first time in its history, a move aimed at trimming its workforce in line with a broader restructuring plan. The offer, which includes a “generous financial package” in addition to earned retirement benefits, comes as part of UPS’s ongoing efforts to downsize its U.S. ground network and reduce dependence on Amazon-related volumes.
The buyouts are part of UPS’s “Network of the Future” initiative, which calls for the closure of 200 sortation centers over five years and increased automation across its facilities. UPS said dozens of sites have already been consolidated over the past year. The company also cited Trump-era tariffs and a planned 50% reduction in Amazon business by mid-2026 as key pressures on parcel volume and profitability.
Union condemns the plan as a breach of contract
The Teamsters union, which represents 340,000 UPS workers, sharply criticized the severance offer. Union President Sean O’Brien called it an “illegal violation” of the national contract ratified last August, which requires UPS to create 30,000 new full-time union jobs over the five-year term.
“UPS is trying to weasel its way out of creating good union jobs here in America,” O’Brien said. “Our members cannot be bought off and we will not allow them to be sold out.”
The contract includes provisions for converting 22,500 part-time jobs to full-time and creating 7,500 new full-time roles. Teamsters argue the buyout program undermines those commitments, particularly since not all departing workers would retain employer-paid retirement healthcare benefits under the new plan.
UPS says it’s staying within contractual boundaries
In response, UPS stated that it had approached the union to discuss the program and remains committed to the 2023 agreement. The company emphasized that the buyouts are voluntary and positioned them as part of a necessary restructuring in an evolving delivery market.
“As we navigate an unprecedented business landscape, we are executing the largest network reconfiguration in UPS history,” the company said.
The dispute comes amid broader tension. The Teamsters recently accused UPS of failing to deliver on its promise to provide 28,000 air-conditioned vehicles and to meet hiring goals. The union gave UPS until July 1 to produce data on job openings and vehicle retrofits; UPS has requested more time to respond.
Restructuring aims to save $1.2 billion in 2025
UPS executives said in April that the company plans to eliminate 25 million operating hours and cut 20,000 positions, with expected savings of over $1.2 billion this year. The company says these cuts are essential to remain competitive in a slower, more fragmented parcel delivery market.
