UPS Buyouts’ big announcement: First time offer to drivers, 20,000 jobs at risk

Big news about UPS buyouts (United Parcel Service). For the first time in its 117 year history, UPS is making voluntary buyout offers to its full time delivery drivers. According to Reuters, this is part of the company’s biggest network restructuring ever which could result in 73 locations closing and 20,000 jobs lost. These changes are due to fewer deliveries and higher costs from a big customer like Amazon.

July 3, 2025 was when the UPS buyouts were announced. Drivers will get a fair package that includes their retirement benefits like healthcare and pension. The offer will be open till March 2026 and senior drivers will get priority. These buyouts are part of UPS’s cost cutting plan which includes around 330,000 full time and part time employees. The company wants to cut costs by $3.5 billion by 2025.

There will be 3.5% fewer package deliveries in the US in the first quarter of 2025 which is why the UPS Buyouts program is happening. Amazon, UPS’s biggest customer, expanded their delivery options which hurt UPS. In April, the company wanted to cut costs and shrink their network. Under this 73 locations in Massachusetts, Pennsylvania, Wisconsin and Ohio will be closing. Jobs of drivers and other employees are at risk with these changes.

The Teamsters Union which represents 340,000 UPS employees has called the UPS buyouts “unlawful”. According to the union, UPS agreed to add 22,500 new jobs in the 2023 contract. “These buyouts break that promise” said Teamsters president Sean O’Brien. The union is asking drivers to turn down the offer and is accusing UPS of breaking the contract. They are prepared to go to court over it.

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UPS buyouts can have a big impact on drivers. The Wall Street Journal reports that UPS drivers make an average of $170,000 a year making them the highest paid delivery drivers in the country. Although drivers who take buyouts will get financial compensation and retirement benefits, the union says the deal is worth less than what their contract is worth. UPS might have a shortage of qualified drivers if more drivers take a buyout which would make delivery tough.

They say they’ve talked to the Teamsters about buyouts and are committed to the 2023 contract. But the Teamsters didn’t agree. They also recalled a promise from UPS to have 28,000 air conditioned vehicles by 2028 which is only 10% done. Buyouts and facility closures have eroded employee trust especially since the company made $21.5 billion in the first quarter.

UPS buyouts are also affecting the company’s stock and investors. UBS cut their price target for UPS to $124 from $128 citing lower demand for deliveries and global trade issues. In April they said they would eliminate 20,000 jobs including management and operational roles. In 2023 they cut 12,000 management jobs. These buyouts are to reduce costs but union opposition makes that hard.