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April 6, 2009
FedEx Corp. has confirmed that the company has cut 1,000 jobs worldwide and 500 in Memphis.
Company spokesman Jesse Bunn said the employees were “salaried exempt” professionals and managers. The laid off workers will be given severance packages, advance notice of job openings and career counseling.
“The decision was very difficult,” Bunn said. “As we said in March and in December, the global economic conditions are bad and continue to get worse. Actions like this are unavoidable.”
In mid-March, FedEx announced it planned to cut more jobs, reduce some workers’ hours and cut back on truck and jet capacity. That came after the company said its third quarter profits fell 75 percent to $97 million, or 31 cents per share.
In February, FedEx cut 900 positions at its FedEx Frieght subsidiary, citing continued decline in consumer spending and unprecedented pressures on the trucking industry.
Those cuts came just a month after FedEx announced in January that the shipping giant would slash its 2009 marketing budget by 25 percent.
FedEx officials had hoped to avoid layoffs and other cuts by trimming salaries.
FedEx CEO Fred Smith said in a statement in December that he would cut his own salary by 20 percent and other senior executives would take between 7.5 and 10 percent salary cuts. U.S. salaried employees received a 5 percent cut.
Those cuts did not include hourly employees, such as package handlers, mechanics and pilots.
“We try and protect as many jobs as possible and strengthen the company so that we are prepared when the economy will rebound,” Bunn said. “In December, we announced a series of cost reductions and clearly those needed to be supplemented.”
Memphis-based FedEx (NYSE: FDX) said these cuts will help the company save $1 billion, along with job cuts across its FedEx Freight and FedEx Office divisions, a reduction of some workers' hours, elimination of certain bonuses and implementation of a hiring freeze.
FedEx Ground's U.S. headquarters is based in the Pittsburgh suburb of Moon Township. It was not immediately clear how the cuts would affect the FedEx Ground unit.
Prior to these layoffs, FedEx employed 32,000 in Memphis and 290,000 people worldwide.
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