The postal services and e-commerce-major FedEx announced on Wednesday that it would slash its officer and director ranks by more than 10 per cent. The move is part of a broad cost-reduction effort that has reduced staffing at FedEx by 12,000 workers since June, a spokeswoman said. FedEx did not specify how many positions would be affected. Most of the cuts came through attrition and other headcount management efforts, spokeswoman Rachael Simmons said.
The investors of the delivery giant applauded the move as FedEx shares rose by 3.4 per cent on Wednesday. The company reportedly plans to slash its expenses by $3.7 billion this year.
“Unfortunately, this was a necessary action to become a more efficient, agile organisation,” wrote Chief Executive Raj Subramaniam in an internal memo, who added that FedEx is consolidating some teams and functions.
Subramaniam is the company’s newly minted CEO. He blamed a global business downturn for the downsizing. Many critics point to a flat-footed response by the company to slowing demand and ongoing profit pressure from the conglomerate’s expensive, separately run business units.
In mid-September, FedEx pulled its profit forecast and shares went down by more than 20 per cent, the largest single-day drop in the company’s 50-year history.
FedEx already has temporarily furloughed workers at its trucking division FedEx Freight as the pandemic-fueled e-commerce delivery bubble deflates and a recession threatens, joining transportation-focused companies ranging from delivery upstart Amazon.com and trucking company C.H. Robinson Worldwide to transportation broker Uber Freight and freight forwarding startup Flexport in announcing layoffs.
(With inputs from agencies)
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