Drivers clearly want to stay at UPS: The parcel delivery company is extending its voluntary layoff program by a few weeks because so few individuals are taking them up on it.
While the trucker shortage is impacting logistics businesses around the world, some larger companies are still trying to trim their workforce to be a bit more lean. UPS is among them, with a big push to reduce overhead amid a strategy shift.
It’s not going well, though, with its buyout offer being largely rejected by UPS drivers, thanks to a number of notable factors.
UPS Extends Voluntary Layoff Program
UPS has quietly extended its buyout offer to employees, allowing a bit more time for drivers to get on board with the program.
While UPS hasn’t confirmed the lack of interest, the deadline extension is a pretty good indicator that there haven’t been enough employees taking them up on it. However, in the company’s earnings call on July 29th, CEO Carol Tomé said there was “a lot of interest,” so it’s hard to say exactly what’s going on.
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The buyout program is fairly generous, as far as buyouts go. The company is offering $1,800 per year of service, with a minimum amount of $10,000 per employee. So, an employee that worked at UPS for 30 years, for example, would be entitled to $54,000.
The original deadline was July 31st, but some reports point to it being pushed all the way to August 14th.
Why Aren’t UPS Employees Taking the Buyout?
While the lack of interest isn’t entirely confirmed, there are a few notable reasons why UPS employees would be wary of taking the buyout offer.
For one, the Teamster union is staunchly opposed to it, saying that the “devious driver voluntary severance plan” isn’t generous enough given what they are asking.
“The Teamsters are prepared to fight UPS on every front with every available resource to shut down this illegal buyout program.” – Sean O’Brien, Teamsters General President
On top of that, the job market is a bit shaky given the Trump tariffs and the advancements in AI, which means that gainful employment is notably harder to come by in 2025.
UPS Offering Buyouts During a Trucker Shortage
UPS is offering buyouts to its drivers in an effort to reduce its workforce. However, there is a persistent trucker shortage that is threatening the stability of the logistics industry as a whole. So, which is it? Are more drivers needed or is UPS overstaffed?
The reality of the trucker shortage is hardly debatable. Our annual logistics report from Tech.co found that 69% of businesses say that driver shortages have had an impact on their ability to meet freight demand.
Still, while that is true, UPS is also in the midst of a strategy shift, planning to reduce its deliveries of Amazon products due to poor margins. It’s also just generally trying to reduce costs, including the closing of 200 domestic package sorting centers.
