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Assuming most drivers who accepted the UPS offer had more than 35 years of service, the cash payout would be between $63,000 and $72,000. The average driver likely received about $86,400 when benefits worth 20% of the cash payout are added, according to calculations by Jindel that were shared with FreightWaves. Applying the estimated severance package value against UPS’s total expense suggests that about 2,000 out of 70,000 drivers, or 2.9% of the driver workforce, ultimately took the deal. Despite the seemingly low turnout, the package “is still good for both the drivers ready to move on and for the company since it amounts to about half of the total compensation it would pay a driver in a full year,” Jindel said. It should be noted that $175 million paid for the early exit packages is a small amount for a company with $91 billion in revenue. Other industry observers have said that the UPS offer wasn’t lucrative enough for most drivers with less experience to accept. Executives said they have eliminated about 32,000 warehouse jobs so far this year through its network consolidation program. In April, UPS said it planned to remove 20,000 jobs in sortation centers because of reduced volumes from Amazon after UPS opted to drop 50% of business with its largest customer because it was barely profitable. Over the past 18 months, UPS has also cut 14,000 management positions. The combined workforce reduction over that period totals 48,000 jobs. UPS will start to realize savings from the driver buyouts during the fourth quarter, CFO Brian Dykes said. Click here for more FreightWaves stories by Eric Kulisch. RECOMMENDED READING:
