UPS offering retirement buyouts to management

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Sandy Springs-based UPS said it is offering buyouts to some of its management employees who are eligible for retirement.

The company said a “select group of non-operations, retirement-eligible U.S. management employees” have been told they are eligible for a voluntary retirement plan, with a financial buyout to retire.

To be eligible, management and support staff at the company’s headquarters and locations throughout the country must be at least 55 years old with 10 years of service, or 65 years old with five years of service, though the threshold is higher for some groups with specialized skills.

Those eligible will get packets with information mailed to their homes and will have until June 15 to decide whether to take the offer. The cash payouts are for those already eligible to retire and do not change retirement benefits.

The move will reduce headcount and operating expense, according to UPS.

Thursday, UPS reported quarterly net income of $1.3 billion, up 15.4 percent. Its income tax expense declined 42 percent, which helped to increase net income. With the new tax law, UPS expects its tax rate to be 23 to 24 percent this year, down from 34 percent.

But the company’s operating profit was down 6 percent, dragged down in part by challenges in its U.S. domestic package business and $85 million in costs and lost revenue due to weather disruptions.

The company said the buyouts are part of a transformation "to take advantage of record growth in demand" for logistics services.

“This is the first of many initiatives to reduce cost and improve efficiency in our business,” said CEO David Abney during an investor conference call. Managing the effort is Scott Price, who joined UPS as chief transformation officer in December from Walmart.

“You find ways that some of these things can be more automated,” Abney said in an interview with The Atlanta Journal-Constitution. “This is just a way to balance the number of people and the skills of the jobs today compared to jobs tomorrow. … No one wants to do mundane stuff if there’s technology that will help them to be more efficient.”

It’s the first time the company has offered buyouts since 2010, according to UPS spokesman Steve Gaut. The company declined to say whether it will move to layoffs if it does not get enough employees taking the buyouts.

“It’s too early to lay out a path that would suggest we have any sort of involuntary reductions,” Gaut said.


UPS profit, first quarter 2018

Revenue: $17.113 billion, up 10.3 percent

Operating expense: 15.593 billion, up 12.2 percent

Net income: $1.345 billion, up 15.4 percent

Source: UPS