2,000 Drivers Left UPS After Taking Buyouts, Analyst Says

About 2,000 unionized delivery drivers accepted a buyout offer from UPS in the third quarter, according to an estimate by Satish Jindel, a longtime parcel-shipping consultant and president of ShipMatrix, Eric Kulisch reported for FreightWaves.

UPS CEO Carol Tomé said during Tuesday’s earnings briefing that the buyouts will cost the company $175 million.

The Atlanta-based parcel logistics giant has not disclosed the actual number of drivers who agreed to take a voluntary separation package.

In July, UPS offered delivery drivers severance packages worth $1,800 for every year of service, part of a major streamlining campaign that includes closing dozens of package stations to align capacity with lower domestic parcel volumes.

UPS extended the acceptance deadline until mid-August because of low interest in the early retirement plan.

A driver with 27 years of experience would receive a $48,000 buyout, according to the UPS offer sheet.

Management previously said that drivers with 25 to 40 years of service were the most likely candidates to take the offer. The Teamsters union said the early retirement offer was insufficient and urged members not to sign up.

Assuming most drivers who accepted the UPS offer had more than 35 years of service, the cash payout would range between $63,000 and $72,000.

The average driver likely received about $86,400 when benefits worth 20% of the cash payout are included, according to calculations by Jindel shared with FreightWaves.