On Wednesday, UPS confirmed it had begun sending letters to about 105,000 package truck drivers offering them voluntary severance packages worth $150,000.
Last week, a federal judge allowed the trucking giant to proceed with its takeover bid over the objections of the Teamsters union. UPS (NYSE: UPS ) has decided to cut 30,000 jobs this year as part of a network consolidation plan aimed at reducing costs and improving efficiency amid falling package volumes. During court arguments, Teamsters lawyers said the union expected as many as 10,000 drivers to accept the company’s offer.
The Driver Choice Plan gives full-time drivers the option to leave their jobs in exchange for a pre-tax severance package of $150,000 as well as retirement benefits such as pensions and health care. Drivers are eligible for a one-time payment regardless of seniority.
Genny Bowman, vice president of communications, confirmed that UPS has begun notifying drivers across the country of the acquisition offer.
“We will share details about this program with our drivers in the coming days,” UPS added in a statement.
The company has set a separation date of late April, according to court documents.
UPS said involuntary layoffs are also possible, depending on how many drivers accept severance packages. The company is separately reducing warehouse workers through attrition and layoffs as facilities close. Twenty-two facilities are expected to close this year.
About 3,000 drivers were offered the company’s takeover last fall, but the program was much more lenient than the driver choice program. Previous compensation was $1,800 in severance pay for each year of service, with a minimum of $10,000.
The Teamsters union complained that UPS violated a national contract signed in August 2023 because UPS promised to add workers and the buyouts amounted to employment changes, which the union claimed had to be negotiated with the union. U.S. District Court Judge Dennis Casper in Massachusetts rejected the union’s argument that workers might be harmed if they quit, saying the outcome of any arbitration would apply to them and that a buyout was a better option than termination.
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