UPS Driver Buyout Program: Federal Judge Clears $150,000 Driver Choice Program — 105,000 Workers Eligible Starting This Week

The UPS driver buyout program is officially cleared for launch. A federal judge dismissed a Teamsters request to prohibit United Parcel Service from implementing a $150,000 buyout program for parcel delivery drivers, saying union claims of harm were unfounded because arbitration can resolve any problems and that workers will be subject to involuntary layoffs if some don't voluntarily leave the company. Judge Denise Casper of the U.S. District Court in Massachusetts stated the union had not shown it would suffer irreparable harm without an injunction. The ruling means UPS will begin informing eligible drivers about the Driver Choice Program this week — the most consequential labor development in the American logistics industry in 2026.

UPS Driver Buyout Program: Full Details of the Driver Choice Program

Under the separation package, called the Driver Choice Program, UPS plans to offer 105,000 drivers, regardless of seniority, a $150,000 lump sum payment plus previously earned benefits in exchange for resigning. Drivers who accept must agree never to work for UPS again and waive their rights to union representation for grievances related to the agreement's execution.

Here is a complete side-by-side comparison of UPS's two driver buyout programs:

Why UPS Is Offering the Driver Buyout Program: The Amazon Volume Collapse

The UPS driver buyout program is a direct response to a structural collapse in package volume. UPS keeps slashing expenses to right-size its network as a planned 50% reduction in volume from major customer Amazon continues. After trimming Amazon volume by 1 million pieces per day last year, UPS expects an additional 1 million pieces to be cut in 2026. Average daily volume declined 8.6% in 2025 and was down 10.8% year over year in the fourth quarter. Demand is under pressure as e-commerce growth normalizes following the pandemic, Amazon draws down business under a mutual agreement, and UPS begins to outsource certain economy shipments.

UPS will also close 24 buildings in the first half of 2026 as part of the cost reduction plan, with additional buildings to potentially close later. The carrier expects the moves, along with building closures, will help it save $3 billion as it adjusts to reduced Amazon volume.

Teamsters Reaction: "A Second Illegal Buyout Scam"

Teamsters General President Sean M. O'Brien said: "For the second time in six months, UPS has proven it doesn't care about the law, has no respect for its contract with the Teamsters, and is determined to try to screw our members out of their hard-earned money." The Teamsters cited at least six violations of the National Master Agreement in the UPS driver buyout rollout — including direct dealing of new contracts with workers, elimination of union jobs when UPS contractually agreed to establish more positions, and erosion of the rights and privileges of union shop stewards.

The size and structure of the separation package carries the risk of internal union turmoil if rank-and-file members are interested in resigning against the leadership's objections. With $150,000 on the table — fifteen times more than what the 2025 program offered most drivers — the gap between Teamsters leadership opposition and individual driver financial interest has never been wider.

What Happens to UPS Drivers Who Don't Take the Buyout

A Teamsters lawyer said during a hearing on Thursday that the union expects 10,000 drivers to accept UPS's offer. For the remaining 95,000 eligible drivers who decline, the picture is far less certain. UPS's global labor relations president Daniel Bordoni wrote in a January 30 letter to Teamsters leadership: "The Driver Choice Program provides eligible drivers the opportunity to leave the company with a significant monetary benefit. By offering this program, the number of layoffs for remaining drivers could be reduced" — suggesting involuntary layoffs for drivers could follow this year.

UPS Stock and the $3 Billion Savings Target

UPS undertakes its largest-ever U.S. network reconfiguration, including dozens of facility closures and workforce reductions. UPS's narrative projects $94.5 billion revenue and $7.1 billion earnings by 2028 — requiring 1.5% yearly revenue growth and about a $1.4 billion earnings increase from $5.7 billion today. The UPS driver buyout program, combined with facility closures and the Amazon volume glide-down, represents the most aggressive restructuring in the company's modern history. Once the Amazon glide-down concludes in the first half of the year, results will start seeing improvement. "First-half cost pressures are expected to be behind us, and we'll be running a more agile U.S. network," CFO Brian Dykes said.