UPS announces voluntary exit program for thousands of drivers

The courier company announced that early retirement compensation offers will be limited to up to 7,500 drivers, as part of a settlement with the union, which had strongly opposed the company’s initial plans. Under the terms of the agreement, UPS will provide $150,000 to drivers who opt for early retirement through the voluntary exit program.

The dispute arose over the so-called Driver Choice Program, which the union claimed was implemented unilaterally by the company without prior negotiation, in violation of the 2023 collective bargaining agreement. The Teamsters argued that the agreement prohibits UPS from entering into individual agreements with drivers without union approval.

This development comes amid a broader restructuring for the U.S. logistics giant. In January, the company announced plans to cut up to 30,000 jobs and close 24 facilities in 2026, as part of a strategy to move away from millions of low-margin deliveries for its largest customer, Amazon.com. The move is part of UPS’s effort to improve profitability and redefine its business model during a period of intensifying competition in the transportation and logistics sector.