July 3 — United Parcel Service (UPS) has announced what it calls the “largest network reorganization in the company’s history” and will, for the first time, offer voluntary separation packages to full-time delivery drivers in the United States. The move is described by UPS as a necessary response to "structural challenges in the global logistics industry," though it has drawn immediate backlash from the union representing its workforce.

In a company statement, UPS said, “This is the first time UPS has offered a voluntary program to full-time U.S.-based drivers. Participants will receive a significant financial incentive while retaining key retirement benefits, including pension and healthcare coverage.”

The International Brotherhood of Teamsters, which represents more than 340,000 UPS employees, strongly criticized the initiative. Teamsters General President Sean O’Brien argued that the buyout plan directly violates the national labor agreement reached in 2023 after months of negotiations. That agreement committed UPS to creating 22,500 new union jobs between 2023 and 2028 to strengthen its U.S. delivery network.

“UPS is attempting to sidestep its obligation to create high-quality union jobs by pushing experienced employees out with a buyout offer that is both insulting and unethical,” O’Brien said. “This is not only a moral failure but a clear affront to federal labor law.”

UPS responded by stating it had informed the union of the plan and reiterated its “continued commitment to all provisions agreed upon in the 2023 contract.”

In April, UPS announced plans to cut approximately 20,000 jobs worldwide as part of a broader cost-reduction strategy. In a similar move in August last year, the company offered voluntary buyouts to some of its pilots amid weakening market demand.

Industry analysts note that UPS is currently under pressure from multiple directions. On one hand, e-commerce giants like Amazon are rapidly expanding their in-house delivery networks, eroding UPS's market share. On the other, competitors such as FedEx are trimming labor costs through a mix of natural attrition and temporary workers.