FedEx plans to reduce 1,700-2,000 employees in Europe
Move likely to save between $125 million and $175 million on an annualised basis beginning in fiscal 2027
NYSE-listed FedEx announced plans to streamline its workforce in Europe as part of on-going measures to reduce structural costs.
"The European proposals aim to reduce headcount across FedEx back-office and commercial teams by 1,700 to 2,000, subject to local law and consultation processes," says an official release.
FedEx is expecting pre-tax cost of the severance benefits and legal and professional fees for the plan to range from $250 million to $375 million in cash expenditures, says a filing with the Securities and Exchange Commission.
"These charges are expected to be incurred through fiscal 2026 and will be classified as business optimisation expenses. We expect savings from the plan to be between $125 million and $175 million on an annualised basis beginning in fiscal 2027. The actual amount and timing of cost savings resulting from the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated social plans and may differ from our current expectations and estimates."
The changes in Europe will include removing positions and consolidating teams in the affected back-office and commercial functions, the release added. "Certain activities performed across the region will also be consolidated to be located in select shared activity centres that are in countries that are best aligned with our needs and the existing FedEx real estate footprint."
Richard W. Smith, Chief Operating Officer, International and Chief Executive Officer, Airline, FedEx says: "FedEx is transforming to best match changing market dynamics and meet the needs of our customers. Alongside the work we’ve done to optimise our networks, we’re taking necessary actions to streamline many of our functions to reduce structural costs while continuing to deliver outstanding service to our customers. We do not take these decisions lightly but they are essential to putting FedEx on the right path for the future.”
Karen Reddington, President, FedEx Europe adds: “These are difficult changes for any business, and we have in the front of our minds our affected team members and their families. In line with our culture, we will conduct this process with the maximum support for those affected and in close consultation with our social partners.”
Fedex Federal Corp from June
In June 2024, FedEx Express, FedEx Ground and FedEx Services will consolidate into Federal Express Corporation.
"I think two words kind of describe this move, one is efficiency, the other one is effectiveness," says Raj Subramaniam, President and CEO, FedEx. "I think we are looking forward to the structure that actually moves us forward on both fronts. And I think at the end of the day, this transformation efforts will set us up to drive improved performance and profitability over the long term."
