UPS has decided to offer buyouts to the delivery drivers, who have united to raise their voices against it. This action has occurred for the first time in the history of UPS, as the company is facing a backlash. It is trying to keep the workers as the parcel networking is reduced by the company, and it looks forward to dropping 50% of the deliveries from Amazon.
Moreover, the management of UPS disclosed in April that to improve the company’s profit and cut excess expenses, they are planning to fire 20,000 front-line employees. In addition, they have drafted an optimization plan named ‘Network of the Future.’ According to it, in the next five years, 200 sortation centers will be closed in the name of profitability. They want to increase automation for handling packages under this plan. It is already in full swing, as within the previous year, about a dozen centers have been demolished.
Buyouts are offered to the delivery drivers
UPS is offering buyouts to the drivers along with benefits to make them leave the company on their will. The parcel drivers are offered a financial package from the side of UPS for leaving the company. In addition, it provides some additional perks to them, including retirement benefits that cover both pension and healthcare. The parcel freight company is trying to transform its business format, which includes reconfiguring the parcel network in the US. On Thursday, they gave this explanation to justify their firing action on the package drivers. The drivers are being fired to reconfigure the business format they need to cut their short-term expenses.
The parcels are voluminous and are under pressure from many factors that have forced the company to reevaluate its logistics. One of the major factors is the tariff policy imposed by Trump’s administration, which has slowed down its imports, causing losses. The second reason is the decision to reduce the 50% Amazon business in approximately 18 months, as it was unprofitable.
Voluntary plan of UPS and public reaction
UPS has planned to eliminate parcel drivers and is offering them some packages in exchange for their jobs. However, the public has caught it off guard, violating a five-year contract signed by it in August 2023. It has angered the Teamsters unions as they are now protesting its broken commitment to create 30,000 jobs in five years. Thus, they have initiated a strike demanding that the drivers not accept the buyout offer by UPS.
According to Teamsters’ President Sean O’Brien, UPS is trying to run away from creating new job opportunities in America. By using the method of buyouts, it has insulted the Teamster drivers who have worked too hard to build the company’s reputation. Under the national contract, UPS is obliged to create new full-time jobs for the working population of America. However, the managers and CEO were thinking that by offering buyouts, they could escape the responsibility of creating new job opportunities for the public. Thus, they have called out everyone to pay attention to the disrespectful act pulled by UPS.
Teamsters asked for statistics from UPS!
According to the Teamsters contract, the UPS drivers who have been employed for 30 or more years are eligible to receive retirement benefits. However, other employees are not likely to receive these benefits. As per the contract signed in August 2023, UPS has to create 22,500 full-time jobs for the public and 7,500 additional job positions, apart from that. UPS has responded to it by saying that they still stand by their commitment to creating job opportunities for the public.
Last week, Teamsters accused UPS of not committing to their hiring procedure and installing 28,000 air-conditioned cars. It says that the workers need the infrastructure that protects them from the scorching heat outside. Additionally, it has demanded the statistics of the job positions available right now and the delivery rating of the air-conditioned vehicles. To respond to this request, Teamsters gave UPS a due date of 1 July, but the company is demanding more time.
As per the plan drafted by UPS, they were expected to save $1.2 billion this year and eliminate 25 million hours by the workforce. However, they are reducing their costs by firing employees by bribing them with buyouts.
Conclusion
UPS has been tangled in a vicious cycle as it has failed to create job opportunities, as it has committed. Moreover, Teamsters is taking strict measures against UPS for disrespecting their contracts and using unfair and illegal methods to reduce its costs.
