14,000 jobs to go at FedEx
FedEx, one of the world’s largest express parcel companies, has announced that it is to cut up to 14,000 jobs in an attempt to reduce costs. The company hopes that the job losses, the first in the company’s history, can be achieved through voluntary redundancies and severance packages. The 14,000 jobs represent about 12% of its total work force.
The reduction in head count has been forced on the company due to weakness in its core air express parcel operations in the USA. FedEx ships about 2.8 million packages daily, a reduction of 200,000 on two years ago. Most of the jobs will go in ‘back office’ functions rather than in air crew or in customer facing roles such as couriers. The cost of the job losses to the company is likely to be around $230-240m (€207-216m) in 2004 although savings are forecast to be $100-130m (€90-117m) in 2004 and up $190m (€171m) a year thereafter.
The job cuts will form part of a wider range of initiatives to re-align costs with falling volumes. However FedEx’s international operations are likely to be unaffected. International volumes have shown consistent increases over the past few years and were up by almost 10% in the first three quarters of the year. FedEx Freight, which has a strategic alliance with Frans Maas, has also increased its revenues by a similar amount. The company sees no immediate up turn in the US market but believes that the economy will improve in the first half of 2004.
