FedEx Announces Plans to Cut 10% of Senior Level Jobs

International courier delivery service FedEx has announced plans to reduce its senior management and director ranks by over 10% as part of a cost-cutting effort. The announcement comes after FedEx has already cut 12,000 jobs since June, reducing the company’s 547,000 full-time and part-time workers by about 2%.

The company’s CEO, Raj Subramaniam, explained in a memo to employees that this action was necessary to make the company more efficient and agile. Most of the cuts were made through attrition, and the exact number of senior positions affected has yet to be disclosed.

Shares in FedEx rose by 3.4% to $200.52 as investors responded positively to the cost-cutting efforts, which are part of the company’s plan to reduce expenses by $3.7 billion this year. The New York Post reports FedEx recently pulled its profit forecast, causing a 20% drop in shares, the most significant single-day drop in the company’s 50-year history. The CEO blamed the global business downturn, but critics pointed to a slow response to declining demand and ongoing profitability issues.

Job cuts are welcome news to investors, especially after FedEx lowered its annual profit forecast. The company is looking to streamline operations and is reducing the number of full and part-time employees to around 535,000, roughly the same as competitor UPS. However, these numbers do not include approximately 6,000 contractors and workers handling most of FedEx Ground’s home delivery business.

Due to the impact of the pandemic on e-commerce deliveries and the threat of recession, FedEx has already furloughed workers at its trucking division and is joining other transportation-focused companies in announcing layoffs.

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