Upton, who had seven hits in 37 Cactus League at-bats, signed with the club on a Minor League deal and was hoping to win one of the outfield jobs. He was released by the Blue Jays right before Opening Day last season and last played in the big leagues in 2016.
"[Upton] had an out, as a number of guys do. So rather than just wait, we felt like we made our decision, and in fairness to them, [we] communicated with them rather than hold them to the hour before they are out," Indians manager Terry Francona said. "We talked to [him] and told him he was not making the club, and he has the right to go talk to his agent to see if there is an opportunity out there."
The Indians also optioned catcher Eric Haase (the club's No. 20 prospect per MLB Pipeline) and infielder Eric Stamets to Triple-A and reassigned outfielder Brandon Barnes and infielder Richie Shaffer, along with right-handed pitchers Preston Claiborne, Stephen Fife, Cam Hill and Neil Ramirez to Minor League camp.
"We tell the young guys in the first meeting to be a sponge and when you go out on the field, you don't back down from anyone," Francona said. "I thought [Haase] exemplified that as much as anybody. He worked with Sandy [Alomar], and Sandy was loving every minute he had with him. …This kid, we thought his camp was stellar, and we also reminded him that his future is in front of him and to enjoy being as good of a team baseball player as he can be."
The club is open to exploring the idea of bringing Upton back on a Minor League deal if he cannot find another job. It's uncertain if Hanigan -- who is attempting to play his 12th season in the Majors as a defensive backstop -- would fit in the club's future plans, with Yan Gomes and Roberto Perez on the big league roster and the emergence of Haase and Francisco Mejia.
The 37-year-old Hanigan went 2-for-13 (.154) in 11 games for Cleveland this spring.
Diaz, 26, was attempting to make Cleveland's roster as a backup infielder, but he will instead get more seasoning in Triple-A. Diaz won the Indians' third-base job last spring and posted the fifth-highest rate of hard-hit balls of any qualified hitter last season, per Statcast™, but he slugged just .327 over 49 games. Diaz was demoted to the Minors midseason and improved somewhat in his return, batting .304 and compiling an .810 OPS in late August and September. Diaz had a great spring with the Tribe, going 14-for-34 (.412) with a home run and 10 RBIs.
"[Diaz] swung the bat really well," Francona said. "With Jose at third, we value him getting his at-bats, and we know that if something ever happens, we got a guy that can really hit. We did try to reinforce how important playing the rest of the game is."
With the transactions, the Indians' Major League roster is at 39.
"Today is obviously a hard morning," Francona said. "You are starting to get to that point in camp when guys that are competing for jobs are told they haven't made the club, so that's a hard one. There are still a segment of guys like Haase that are young where you can tell them how good they did and how proud you are of them and their future is ahead of them."