FedEx is shedding more than 10% of its officer and director roles while working to consolidate other teams and functions.
In a letter to team members on Wednesday, company CEO Raj Subramaniam said, “This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions.”
“Saying goodbye to longtime colleagues and friends whom we value and respect is extraordinarily difficult,” he added. “Unfortunately, this was a necessary action to become a more efficient, agile organization.”
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The job cuts came after FedEx announced in December that the package delivery company is prioritizing actions to quickly reduce costs in order to align fiscal 2023 costs with weaker-than-expected volume.
The company identified an incremental $1 billion in cost savings beyond its September forecast, and expects to generate total fiscal 2023 cost savings of approximately $3.7 billion relative to its initial fiscal 2023 business plan.
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Revenue for the three months ended November 30 fell to $22.8 billion from $23.5 billion year-over-year.
Net income decreased to $788 million from $1.04 billion.
Operating income declined 64% year-over-year due to lower global volumes, partially offset by an 8% package yield increase.
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FedEx announced in November that its less-than-truckload arm unit, FedEx Freight, would furlough an unspecified number of employees to match lower-than-expected demand.
The furloughs were expected to last around three months.
FedEx Freight spokesperson Miranda Yarbro told FreightWaves the furloughs – which are voluntary – would affect only a few drivers.
Currently, the transportation and business services company employees roughly 555,000 globally and delivers 16 million shipments per day.
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Bradford Betz contributed to this report.