FedEx To Offer U.S. Staff Buyouts in Cost Cut Effort
FedEx Corp. will soon begin offering buyouts to U.S. employees in an effort to cut costs.
The world's second largest package delivery company will focus on employees in its Express and Services units, it said Monday.
Express is where FedEx got its start in 1971, and it's now the company's biggest segment by far. The speedy shipping division, which moves 3.5 million packages on an average day, has been hit hard as people shift to slower delivery methods to conserve cash. FedEx has been forced to cut costs as well and has already removed some aircraft from its fleet of more than 600 to account for a loss of demand. The unit reported revenue of $26.5 billion in the latest fiscal year and has more than 146,000 employees worldwide.
Services is FedEx's behind-the-scenes logistics division, but it also includes FedEx Office, formerly Kinko's. It was formed in 2000 and with annual revenue of $1.7 billion in 2012, is one of FedEx's smallest units. It has more than 12,500 employees.
The Memphis, Tenn., company said it hasn't decided how many employees it needs to cut. Those that are close to retirement are also eligible for buyouts.
In June, FedEx Corp. warned slow global economic growth would crimp its earnings through next year. It vowed significant cost cuts to counter any drop in package shipments. Its forecast for the first-quarter, which ends this month, fell well below Wall Street's expectations.
(The Associated Press)