NEW YORK (AP) -- FedEx will soon begin offering buyouts to U.S. employees in an effort to cut costs in the face of a weakening global economy.
The world's second largest package delivery company hinted at cutbacks earlier this summer when it said that slowing economic growth would crimp its earnings well into next year. It has already removed some aircraft from its fleet of more than 600 to account for a loss of demand.
While FedEx hasn't yet decided how many positions will be eliminated, it will likely focus on slow-growth areas like its Express and Services units.
Express is where FedEx got its start in 1971, and it's still the company's biggest segment by far. The speedy shipping division, which moves 3.5 million packages on an average day, has been hit hard as people shift to slower delivery methods to conserve cash. The unit is also being dragged down slowing Asian growth and a reduction in demand for Asian goods from the U.S. and Europe. The unit reported revenue of $26.5 billion in the latest fiscal year and has more than 146,000 employees worldwide — 102,000 of those in the U.S.
Services is FedEx's behind-the-scenes logistics division, but it also includes FedEx Office, formerly Kinko's. It was formed in 2000 and with annual revenue of $1.7 billion in 2012, is one of FedEx's smallest units. It has 13,000 employees, all of whom are U.S. based.
FedEx said those that are close to retirement are also eligible for buyouts.
When it reported fourth-quarter earnings in June, FedEx vowed significant cost cuts to offset any drop in shipments. Its forecast for the first-quarter, which ends this month, fell well below Wall Street expectations.
And second-quarter results released in late July by larger rival United Parcel Service Inc. suggested that the global economic slowdown may be even worse than FedEx anticipated.
UPS lowered its forecast for all of 2012 and said its third-quarter earnings will fall below last year's results, with many customers fearing what's in store for the second half of the year. Their skittishness was also felt in the second quarter, where UPS missed analysts' expectations for both earnings and revenue.
UPS also said it's making cuts in its business to make up for the shortfall. It predicts global trade will grow even slower than the world's economies — a trend not seen since the recession.
Shares of FedEx Corp. fell 3 cents to close at $87.77 Monday. UPS lost 15 cents to hit $76.15.
13 comments:
At our Mira Loma terminal, five office personal were given the option to become part time employees or a buyout of one weeks pay for every year you have worked for the company. And yesterday Fred Smith received a 13.7 million dollar bonus! Isn't that a kick in the ass to those MLR employees. Thanks Freddie!
Last time around the offer was up to a max of 12 weeks pay, can't imagine it being any better this time..
Hay are they doing that in SBO? I will take a buyout in a second so I dont have to continue to be treated like crap by red shirt manager Brad Egghead on the dock. If we had a union he couldnt treat us like he does and he wouldnt be untouchable like he says he is. If he wasnt here not as many dockworkers would be signing cards Can we get a union or a buyout? Please.
P-S-P tell us we "might" be eligible, so we can plan= plan for WHAT? no clue as to who is or isn';t eligible. And they wonder why everyone wants out. it can't come soon enough, we are sick of the lies.
SBO dock dude, its about time someone speaks up about Brad, when he is not sitting behind a computer he is acting like he knows it all and threatening us. From what I hear he is protected by Director Neil Booth which is why he gets away with treating us like shit. Its time we get SBO organized, its a terrible place to work and no one seems to care.....thats why we dont care!
If they offer a buyout in SBO I am taking it! I cant take the doom and gloom any longer, this place is a shit hole.
I'm also taking the buy out,if offered.I can't stand this damn place,and I only been driving for 7 yrs...bunch of morron dispatchers!
brothers there is HOPE! and its up to us! we can do this! its not impossible! go teamsters!!!!
slick_teamster
Sorry slick I doubt the teamsters could help us guys in SBO. Not unless they can get rid of the managers that treat us like shit and threatin us every day. Most of us are just buying our time until other jobs start hiring. Where is my buyout?
they need to look at"fat Charlie Brown head"over in MRL,biggest idiot ever
With a union, management can't harass of threaten you. And if they do u file a grievence report and they can get in trouble. As long as you do your job no one should bother u. Brother know Ur rights. A lollipop (supervisor hahah) tried yelling at me and I told him to shut his mouth and respect me. And he just walked away like a dog. have faith brother. Go teamsters. Don't quit and vote yes to unionize it will be well worth it .
Slick teamster
slick Teamster, sorry brother we cant get away with that in SBO.
are u serious?
dang i guess SBO is hell, just like every fed ex freight terminal. and i thought SLG was Hell!
sometimes i ask myself how did i end up in this big ugly mess of working for fedex freight for such a long time! BUT there is hope. i can form a union at my terminal and so can other workers at other terminals and make a change.
GO UNION! lets make this hell into a better place and show that anything is possible..lets use our brothers from canada fedexfreight as an example
go teamsters ! TRUST NO RED SHIRT!
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