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.