FedEx will continue with cuts despite strong share price
FedEx has vowed to push ahead with its USD 1bn internal cost cutting exercise, despite seeing an increased share price of USD 1.58.
FedEx has vowed to push ahead with its USD 1bn internal cost cutting exercise, despite seeing an increased share price of USD 1.58.
By the end of the second quarter of 2008, it had risen from USD 1.54 on the same period last year. However, Fred Smith, boss of FedEx, warned trading was set to become tougher through 2009.
“Our financial performance is increasingly being challenged by some of the worst economic conditions in the company’s 35-year operating history.”
He said FedEx was working hard to manage costs while maintaining customer service levels.
“With the decline in shipping trends during our second quarter and the expectation that economic conditions will remain very difficult through calendar 2009, we are taking additional actions necessary to help offset weak demand, protect our business and minimize the loss of jobs.”
FedEx has embarked on massive USD 1bn cost saving exercise that included a freeze on temporary labour, reduction in working hours, job cuts at FedEx Freight and company-wide salary reductions.
During the second quarter FedEx saw total revenues up just 1% to USD 9.54bn, from USD 9.45bn the previous year. Operating income was at USD 784m for the same period, up from USD 783m the previous year.
