- UPS is offering voluntary buyouts to its full-time U.S. drivers for the first time in its 117-year history.
- The move is part of a major restructuring, aiming to cut around 20,000 delivery driver jobs.
- UBS has lowered its price target for UPS to $124 due to declining demand and global headwinds.
- The Teamsters union opposes the buyouts, citing a 2023 agreement to add 22,500 jobs.
- The changes target over $1.2 billion in annual savings, along with closing 73 facilities.
UPS has announced a voluntary buyout program for full-time U.S. drivers, marking the company’s first-ever severance offer to unionized employees. The buyout program is part of a large-scale restructuring as the company faces weakening demand and shifts in its business model.
The logistics giant is currently eliminating approximately 20,000 driver positions. According to a recent statement, UPS is restructuring its delivery network and offering what it describes as a “generous financial package” to drivers who choose to leave. At the same time, UBS has cut its price target for UPS stock from $128 to $124, pointing to reduced demand and international pressures.
In an official release, UPS stated, “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 that would provide an opportunity to receive a generous financial package if they choose to leave UPS.” The company’s changes are designed to improve efficiency and address challenges in both domestic and international markets.
However, the proposed driver buyouts have met resistance from the Teamsters union. The union argues that the program violates a 2023 contract that requires UPS to create 22,500 new jobs. Teamsters president Sean O’Brien said, “Our members cannot be bought off and we will not allow them to be sold out. UPS needs to live up to the existing contract.”
UPS aims to achieve savings exceeding $1.2 billion each year by reducing operating hours and closing 73 facilities in addition to the voluntary buyout program. These measures are intended to address slowing demand and improve financial performance highlighted by recent analyst actions.
Recent actions from UBS lowering its price target reflect growing concern about UPS’s ability to manage international pressures while maintaining profitability. The company’s network reconfiguration is described as the largest in its history, impacting thousands of workers across the United States.
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