United Parcel Service made company history – of sorts – in its efforts to boost profits.
For the first time, the delivery service is offering voluntary buyouts to union-represented delivery drivers in an attempt to boost profits by slimming operations.
In a statement released Thursday, UPS officials said drivers would get “a generous financial package if they choose to leave UPS,” in addition to any earned retirement benefits, including pension and health care.
The service, based in Atlanta, is carrying out a sweeping plan to shrink its network to improve efficiency in response to a decline in parcel volumes following a pandemic-driven boom in e-commerce.
The decision to offer unionized drivers buyouts reflects the “unprecedented business landscape,” the company said. UPS has not indicated how many drivers it is looking to shed or when it plans to make the offer.
Bloomberg reported that UPS’ shares fell less than 1% as of 10:41 a.m. in New York on Thursday. The stock had declined 16% this year through Wednesday’s close, trailing the S&P 500 Index’s 6% advance, Bloomberg reported.
The company announced in April it was planning to reduce its operational workforce – a group that includes delivery drivers and package handlers – by 20,000 workers this year and close dozens of facilities in response to lower package volumes from its largest customer, Amazon.com Inc. UPS earlier this year disclosed plans to slash its volume from the online retailer by more than half over 18 months, a swift decision that unsettled Wall Street, according to Bloomberg.
