FedEx is cutting global executive and executive jobs by more than 10%, the courier’s latest cost-saving measure, as economic concerns and declining e-commerce weigh on demand for package delivery.
The company plans to consolidate some teams and functions in addition to reducing headcount, 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 match the size of the network to customer demand, he said.
“This process is critical to ensuring we remain competitive in a rapidly changing environment and requires some difficult decisions,” Subramaniam said in the note.
The latest layoffs bring FedEx’s layoffs to 12,000 since June, a spokesman said.
Shares were up 2.5% at 12:18 p.m. in New York.
Since taking over as CEO from founder Fred Smith in June, Subramian unveiled $3.7 billion in spending cuts for this fiscal year in response to a sharp decline in shipment demand. The steps include furloughing workers, curtailing cargo flights and parking some aircraft.
The decline in parcels is industry-wide, with rival United Parcel Service Inc. reported on Jan. 31 lower volumes in the U.S. and a forecast for sales to decline in 2023. Couriers face a market in which consumers have returned to shopping in stores, inflation is eating away at their purchasing power and companies are sending fewer goods by air freight now that sea freight rates have plummeted and supply chain delays have been corrected.
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