Signed, Sealed, Resigned? Teamsters and UPS Reach Buyout Agreement

Last summer, UPS announced a ++voluntary driver buyout program++ on the heels of narrowly avoiding a Teamsters strike. The ++Driver Voluntary Separation Program++ offered $1,800 per year of service at UPS, with a minimum payout of $10,000. The Teamsters called the offer “paltry” and urged its members not to accept the buyout.

But UPS didn’t leave the buyouts in 2025. In its January earnings call, UPS announced plans to cut an additional 30,000 jobs related to the Amazon glide-down. We’ll take a look at the new Driver Choice Program (DCP), who’s eligible, what the Teamsters have to say about it, and how these changes will affect UPS customers.

UPS Buyouts: Where They Started

In January, UPS CFO Brian Dykes announced the carrier’s plan to "reduce total operational hours by approximately 25 million" through buyouts and facility closures. And the benefits aren’t insignificant. The carrier would save approximately $3 billion this year with those changes.

One way it planned to achieve those goals? The DCP: early retirement with a one-time payment and a promise not to work for UPS ever again.

As expected, the International Brotherhood of Teamsters was none too happy about UPS’s attempt to buy out unionized workers.

Teamsters vs. UPS: The Battle Over Driver Buyouts

Last month, UPS ++withdrew its buyout program++ from 13 states after 37 local unions in the Central Region filed grievances. In a ++Teamsters press release++, the union’s General President Sean M. O’Brien said, “UPS has conceded that its buyout programs are illegal. They are scams designed to fuel corporate greed. These programs violate the Teamsters contract and UPS knows it.”

According to the Teamsters' court filings, they believe the DCP violates several key provisions of the National Master Agreement, including making deals directly with workers, cutting union jobs that were supposed to be added, and chipping away at the rights of union shop stewards.

It seems UPS was using the “it’s better to ask for forgiveness than permission” playbook— and there was no forgiveness to be found. Instead, Teamsters and UPS negotiated a deal aimed at “rewarding and protecting the seniority of Teamsters drivers.”

UPS agreed to cap its buyouts to 7,500 people, with each voluntary retiree receiving a lump-sum payment of $150,000. The carrier also agreed that this would be the last buyout offer until the National Master Agreement expires on July 31, 2028.

Should Buyouts Affect Your Buying Habits?

Let’s do the math. If UPS receives and accepts 7,500 applications for the DCP and pays each $150k, that’s a $1.125 billion payout.

Cutting the workforce by 7,500 is a far cry from the carrier’s reported goal of 30,000. As a shipper, it’s easy to imagine that UPS is eager to fill its trucks as Amazon volume declines, making now an ideal time to switch to UPS or renegotiate your current contract.

Trust ShipRx to negotiate your new or existing ++UPS contract++ for savings that are anything but “paltry.”