The deal marks a path forward for UPS to install its planned driver buyouts as part of a large-scale cost savings plan without invoking the ire of the Teamsters, which represent many of the carrier’s U.S. employees. The company already deployed a similar separation program in 2025, with about 3,000 of the nearly 115,000 eligible drivers accepting that offer.
The Teamsters sued UPS in February over claims the latest buyout plan violated the union’s labor contract, a case UPS eventually won. Although a judge cleared UPS to proceed with the buyouts, the initiative still faced opposition among some Teamsters locals, leading UPS to roll back the program across 13 states in the company’s central region. Under the agreement announced Sunday, UPS said the buyout program will be offered on a nationwide basis, including in the central region.
“The DCP has been well received by our employees, with strong interest across the country,” UPS said in a statement about the agreement. “Applications will be approved based on seniority and the needs of the business, as originally planned.”
In addition to the buyout limitations, the Teamsters said UPS has agreed not to pursue or offer any other severance programs for the duration of its current national master contract with the union, which doesn’t expire until July 31, 2028.
The agreement comes as UPS works to trim its U.S. employee ranks and rightsize its network amid a steep reduction in the number of deliveries it makes for Amazon. The company plans to cut up to 30,000 operational positions and close 24 buildings in the first half of 2026, EVP and CFO Brian Dykes said in January.
