UPS continues to make deep cuts to improve profitability, including 34K driver and operations jobs in 2025.
UPS is using gig drivers for some deliveries. Roadie’s presence continues to grow. UPS has a contractual commitment to create a certain number of Teamster union jobs over the current 5-year agreement All of these factors combined creates risk for UPS.
A potential risk is increased labor expense in the back half of the agreement [runs through 7/31/28], which was questioned on the Q3 earnings call.
Q: “The union saying that you guys have committed to net job increases through the course of the contract. How do you see that playing out in the remaining two and a half years of the contract? Would you have to start hiring again to make up for that difference?”
A: “We are in compliance with the terms of our contract.” UPS CEO Carol Tome
CFO Brian Dykes went on to explain part of the job creation requirement can be met by converting PT employees to FT, but the numbers weren’t outlined. Expense risk or not, there’s always some level of labor stoppage risk.
While there’s no indication of that risk currently, and there seems to be constant Teamster rhetoric, the growing presence of gig drivers within UPS, combined with continued job cuts, and potentially less volume for Teamsters to deliver [when UPS reaches an agreement with the USPS], will elevate the strike risk at some point.
Original publish date: October 29, 2025