FedEx staff taking voluntary redundancy next year will get four weeks of pay for per working yearunder cost-cutting measures aimed to help increase annual profits by $1.7 billion over the next
three years, according to US media reports.Those employees volunteering for the buyout programme will reportedly get four weeks of payfor every working year, capped at a maximum of two years of base pay, numerous newspapers reported,citing the company.
The aim is to reduce the fixed head count by several thousand people. The majority of theemployees affected are based in the USA.
Eligible staff will be notified in February 2013 and can apply for the programme until Aprilat the latest. In May, they will get a response if they are accepted and the first wave ofemployees will start leaving on May 31, 2013, the last day of FedEx’ fiscal year. The next wave isexpected to leave half a year later. The remaining employees concerned are due to leave a yearafter, on May 31, 2014.
The targeted cost savings come in response to changing customer demand for express servicesshifting towards slower, less expensive solutions in view of the struggling economy.
FedEx chairman, president and CEO Fred Smith already said in August that a significantportion of the profitability improvement would come from cost reductions at FedEx Express and FedExServices as they had been hurt the most by the global economic conditions.
The express unit is still the company’s largest business employing 146,000 people worldwide,two-thirds of whom are based in the USA. It ships around 3.5 millions parcels a day on average, inmost cases by air. FedEx Services, the company’s second unit concerned, includes FedEx Office andis one of its smallest divisions with 13,000 employees based in the USA.
The profit improvement initiatives do not include ongoing base profit improvements at FedExGround and FedEx Freight.
