UPS, after caving to Teamster’s deluxe contract demands in 2023, starts laying off workers

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The Teamsters were jubilant in August, after their members ratified a five-year contract for more than 340,000 UPS Teamsters, raising wages across the board, and awarding drivers annual pay of over $170,000 a year for full time work, if they stay until the end of the contract.

By the end of the contract, all full-time UPS delivery drivers will make $49 per hour on average, or about $102,000 annually.

On Tuesday, UPS management announced it will let go of 12,000 people, approximately 14% of its 85,000 management jobs. As wages are driven upward, the company will no doubt turn to artificial intelligence and automation to maintain profits.

Part of the agreement the company signed with the International Brotherhood of Teamsters required the company to hire 7,500 new full-time Teamster jobs at UPS, and to fill 22,500 open positions. Thus, the layoffs at UPS appear to be in the management tier.

On a call with shareholders, Chief Executive Officer Carol Tomé was quoted by Bloomberg News saying job reductions were due to softer demand for packages and higher labor costs. Layoffs would save the company $1 billion in 2024, she said.

“We are going to fit our organization to our strategy and align our resources against what’s wildly important,” Tomé was quoted as saying. She added that there will be a “change in the way we work” and that she is ordering workers to return to the office five days a week. Many workers in America are still working from home or on split schedules, a work style that started during the Covid pandemic of 2020-2021, which has led to a number of detrimental results for companies.

UPS employs nearly 500,000 people, and the Teamsters, which represents 300,000 of the workers, threatened to strike if higher wages were not part of the final labor agreement.

 UPS announced that its fourth-quarter 2023 consolidated revenues of $24.9 billion were a nearly 8% decrease from the previous year’s fourth quarter.

“Consolidated operating profit was $2.5 billion, down 22.5% compared to the fourth quarter of 2022, and down 27.1% on an adjusted basis. Diluted earnings per share were $1.87 for the quarter; adjusted diluted earnings per share of $2.47 were 31.8% below the same period in 2022,” the earnings report said.

Alaska Rep. Mary Peltola can take credit for the layoffs. She came down solidly on the side of the Teamsters last year in the middle of the contract negotiations. Peltola was one of 172 of the 213 Democrat House members who pledged in an open letter to not intervene if the negotiations broke down and the strike was called.

Along with Peltola, far-left Democrat members of The Squad members signed the letter of support of Teamsters, including Jamaal Bowman, Greg Casar, Cori Bush, Ayanna Pressley, Pramila Jayapal, Rashida Tlaib, Ilhan Omar, Alexandria Ocasio-Cortez, among others in the Democrat caucus.

“We are hopeful that both sides can negotiate in good faith and reach a consensus agreement that addresses basic human needs and allows workers to do their jobs safely and with dignity. However, in the event a fair and equitable collective bargaining agreement cannot be reached, we commit to respect our constituents’ statutory and constitutional rights to withhold their labor and initiate and participate in a strike,” the congressional representatives said in their letter.

The company made no concessions at the bargaining table last year, and the final contract provides these employment benefits, as detailed by the Northwest Progressive Institute:

Historic wage increases. Existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the contract. Existing part-timers will be raised up to no less than $21 per hour immediately, and part-time seniority workers earning more under a market rate adjustment would still receive all new general wage increases.

General wage increases for part-time workers are double the amount obtained in the previous UPS Teamsters contract — and existing part-time workers received a 48 percent average total wage increase over the next five years. Wage increases for full-timers will keep UPS Teamsters the highest paid delivery drivers in the nation, improving their average top rate to $49 per hour.

Current UPS Teamsters working part-time received longevity wage increases of up to $1.50 per hour on top of new hourly raises, compounding their earnings. 

New part-time hires at UPS now start at $21 per hour and advance to $23 per hour. All UPS Teamster drivers classified as 22.4s are reclassified immediately to Regular Package Car Drivers and placed into seniority, ending the two-tier wage system at UPS.

Safety and health protections, including vehicle air conditioning and cargo ventilation. UPS will equip in-cab A/C in all larger delivery vehicles, sprinter vans, and package cars purchased after Jan. 1, 2024. All cars get two fans and air induction vents in the cargo compartments.

All UPS Teamsters now get Martin Luther King Day as a full holiday.

No forced overtime on Teamster drivers’ days off. Drivers would keep one of two workweek schedules and can’t be forced into overtime on scheduled off-days.

UPS Teamster part-timers have priority to perform all seasonal support work using their own vehicles with a locked-in eight-hour guarantee. 

Seasonal work is contained to five weeks only from November-December.

The creation of 7,500 new full-time Teamster jobs at UPS and the fulfillment of 22,500 open positions, establishing more opportunities through the life of the agreement for part-timers to transition to full-time work.

More than 60 total changes and improvements to the National Master Agreement — more than any other time in Teamsters history — and no concessions from the union.

UPS, like Amazon, has been experimenting with drone delivery. UPS Flight Forward is testing drones that can deliver small packages beyond the visual line of sight, without having to use human spotters on the ground monitoring the route or skies for other aircraft.

31 COMMENTS

  1. As if nobody with a working brain could have seen THAT coming…🤦‍♂️ Peltola is such a tool…

  2. Typically when a labor union contract provides for increased wages and benefits the offset is higher productivity by the represented employees. It is exceedingly difficult for a company operating on the margins to grant higher operating costs (ie, wages and benefits) without commensurate offsets. Yet UPS caved-in to the Teamsters without any productivity offsets save for layoffs. Ironically it would appear the bulk UPS employees paying the price of a new Teamsters contract are non-represented management employees. By doing that UPS is sending the wrong message to its non-represented management employees. Those non-represented employees are probably wondering if they should organize a union.

    • The union is clearly winning this battle–taking care of frontline workers. Unrepresented management can take the hit this time. I do love your devotion to middle-management though, enlightening on what you prioritize.

  3. Good article. I must say, though, I believe some of these layoffs are due to regular Americans tightening their wallets. Christmas season is when most retailers make the majority of their revenue for the year. I’ve been a seasonal driver 2 years in a row here in Alaska-and this 2023 season was soft (slow) – not the expected volume. Either consumers are not celebrating Christmas or they are feeling the effects of runaway inflation.

    Additionally, retailers ordered far less boxes (to ship goods) than previous years—I heard on a retailers economist show.

  4. There is no skill set in driving UPS truck that should demand $102K a year, none. This is representative of what a union can do to decimate a company. You can be UPS is looking at contracting out some segments of it’s company. What the union has done is drive the company to segment it’s operations.

  5. Other announced layoffs include PayPal, Block and Cruise. All of the UPS layoffs were in Management, in Alaska $49/hr is barely a middle income wage for a single earner family of 4.

  6. I believe Amazon is also taking a bite out of the profits for parcel delivery companies. Im no fan of teamsters or Amazon, just saying.
    On the bright side maybe we as taxpayers can provide some sort of bailout….yay, bailouts.

  7. I remember a friend who chucked cardboard for UPS back in the late 70’s that he got paid for 8 hrs. even if he finished his route much quicker.

  8. This is happening all over the country. Westrock is closing plants all over the US. “Optimizing” they say, actually “industrial vandalism “. I lost my job after 44 years!

  9. Higher wages demanded and paid almost always equals lay-offs and/or more automation. Almost always means higher costs to consumers also. Unions have put to death many businesses in America, lost to overseas. In the 60s and 70s almost everything was made in America, but try to buy an American made product now. Unions.
    I was taught by my dad that if you don’t like your job because of wages or conditions, go find another one that suits you better. If you are good enough to warrant a better wage, you’ll be hired. Unfortunately, many times sucky workers are supported by unions.

    • “In the 60s and 70s almost everything was made in America, but try to buy an American made product now. Unions.” In fact private sector union membership was highest from the 40’s through the 70’s with the peak just before the 60’s and it is only a fraction today of what it was then. You can thank the offshoring of industrial jobs caused by overburdensome governmental regulations for most of that. It could be argued that the unionization of the government has also led to the offshoring of industrial jobs.

  10. I’m a UPSer and I will start by saying that by the contracts end, collective benefits including wages AND other benefit payouts including health insurance and retirement etc will total $170,000/year. Right now the top wage rate is close to $47/hr and with the raise schedule will be near $52/hr by 2028, not including cost of living adjustment. Now, take into account my dues which are near $300/month, and which I basically consider to be paying for my health insurance because the union pays for the health benefits of its members, not UPS. UPS also does not match any 401k contributions for union members like other jobs do.

    I’ve seen some layoffs, but honestly, a lot of those consisted of laying off redundancy within management. If you had a company and 2 people were doing the job of one wouldn’t you consolidate those positions? It just makes sense from a business standpoint.

    I’m not necessarily a pro union person, never was, and still am hesitant about being a member, but it’s nice to know I have someone fighting for my wages. At my last job, it took me 3 yrs of fighting tooth and nail and working my tail off to get a raise.

    This year also saw one of the slowest peak seasons in 5 years I’ve been around UPS.

    I think this article unnecessarily took jabs at people just for having a certain political alignment and this type of rhetoric is just causing a further divide in this country. Pro union or not, Democrat or Republican. Every worker who puts in the effort deserves a wage comparable to their efforts, so maybe you should fight harder for yourself and stop griping about those of us who have real representation.

    • For someone not claiming to be a union shill, you sure talk like one.

      Please remember your arrogance when your union overreach costs you your job. And it’ll be interesting to see how long the union supports you after you can’t pay your dues anymore.

      There are so, so, so many steelworkers, auto makers, and defunct airline employees (a very short list) who said the same thing. Most not working anymore. Their companies either contracted, got more efficient, or went to non union states. More than a few saw companies fold entirely. Hint: robots don’t complain, take breaks, or demand raises.

      Basic economics: UPS does not exist to give you a job or pay your healthcare. UPS exists to move packages from one place to another in the fastest, most cost effective manner possible. Not to give you a job. The day they decide the services any employee offers exceed the cost they are willing to pay, the employee will go away. It’s just that simple. If the costs continue to exceed the expense UPS is willing to bear, more jobs go away.

      Through your arrogant myopia you see, but completely misunderstand what you see. You see people who are angry at the fact they aren’t blessed with union contracts. Wrong. Most of us really don’t care. The reality is we are flat over union arrogance. You are a classic example.

      And that is a drive down reality street.

  11. Good for Worker for a change. Look at the cost of living over the Biden years. Throw the China Flu impact on the blue collar workforce are important factors in determining the REAL cost of living impacts to the average worker.
    For the people who equate loss of American jobs overseas but do not report on incredible numbers of Hedge Fund Millionaires during the same time period are not being honest. The export of jobs has been encouraged by the U.S. Government by allowing overseas production to undercut American made products due to the lack of tariffs under the guise of Free Trade. These overseas products have been the tool to keep the lid on the actual cost of living wage increases for the American worker.
    All you fools that are bitching about someone who got a wage increase needs to look in the mirror ask yourself what is the value of a dollar today.

  12. Other trucking companies in the Lower 48 are also having problems, both union and non-union. A couple of freight brokers have gone out of business. Spot rates have been flat for about a year now due to lower demand. Less freight moving is a bad sign for the economy overall.

  13. Why aren’t higher wages based on profit of the company. Unions killed Gremlin in Wisconsin and they can kill UPS. There will be someone to take over the transport.

  14. Amazon is growing by leaps and bounds . UPS and FedEx are feeling the pain . I dislike Amazon and their Chinese goods they are pushing .

    It’s amazing that an Amazon 737 comes to Fbks each day from Portland . Haven’t ever seen a UPS freighter in Fbks other than diverted to Fbks from weather issue in Anchorage . Do see the FedEX ATR come in each day .

    I’ve had some tough dealings with the FedEx folks at counter in Fbks . Awful nosy and kind of jerks . Basically acting like they work for the government . Maybe ex military hires?

    Ten years ago FedEx was distributing most of the Fentanyl coming to USA from China , unwittingly .

  15. I would like to know how any of what I said came off as arrogant. I know that I am expendable and hold no reliance on the union. I was simply clarifying facts that the article left out. So many people decry the wage increases because they are misreported. I don’t expect anything to be paid for me by anyone except for the money I earn doing what is expected of me for the wage that I deem equitable. If I wasn’t compensated accordingly, I would go find another job that I certainly do not expect the union to provide for me. I use the union as a means to my end and only that. The wages are great, the benefits are excellent and if UPS were to decide to close up shop or expel the union… there are plenty of other places hiring for my skill set.

    Maybe you should remember your arrogance next time you assume you know who you are talking to.

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