FedEx to Cut Top Management Jobs as CEO Seeks Cost Savings
$FedEx (FDX.US)$ is cutting global officer and director jobs by more than 10%, the courier’s latest cost-saving step as economic concerns and waning e-commerce weigh on demand for package delivery.
The company plans to consolidate some teams and functions in addition to the headcount reduction, part of an effort to become a “more efficient, agile organization,” Chief Executive Officer Raj Subramaniam said Wednesday in a memo to employees. The changes will align the size of the network with customer demand, he said.
The latest cuts bring FedEx’s total employee reductions to 12,000 since June, a spokeswoman said. As of May, the company had 345,000 full-time workers, according to a regulatory filing.
The shares rose 4.3% Wednesday in New York, bringing the gain this year to 17%.
Since taking over as CEO from founder Fred Smith in June, Subramamian has unveiled $3.7 billion in cost cuts for this fiscal year in response to a rapid decline in parcel demand. The steps include worker furloughs, cutting cargo flights and parking some planes.
The slump in parcels is industrywide, with rival United Parcel Service Inc. reporting on Jan. 31 lower US volumes and a forecast for declining sales in 2023. Couriers are facing a market in which consumers have returned to shopping in stores, inflation is eating away at purchasing power and companies are sending fewer goods by air freight now that maritime shipping rates have plummeted and the supply-chain delays have been corrected.
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