In an attempt to cut cost, FedEx is going to begin offering buyouts to U.S. employees in order to begin cutting cost in an effort to save the struggling company.
FedEx has yet to announce what sections of business it will cut back first but it will more than likely be the areas that bring in the least amount of money for the company like its Express and Services units.
Consumers have begun to purchase slower methods of delivering packages worldwide in order to save money in the tight economy.
Express is Where FedEx got its start in 1971, and is still the company's biggest division which moves about 3.5 million packages on an average day. 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.
FedEx says, employees 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 Servicesuggested 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. rose 9 cents to $87.89 in early morning trading Monday. UPS lost 30 cents to hit $76.
© 2017 Jobs & Hire All rights reserved. Do not reproduce without permission.
