The cuts, which will take place over 18 months, are expected to result in pre-tax costs of between $250 million and $375 million due to legal fees and severance payments. However, FedEx believes these measures are essential to address the slowdown in its air-based express unit, its largest segment.
Reuters also noted that the move is part of FedEx’s broader plan to cut $4 billion in costs by the end of fiscal 2025, including $1.8 billion in fiscal 2024. The company aims to restructure its delivery networks and tighten capacity to improve profitability.
The job cuts will primarily affect back-office and commercial functions across FedEx’s European operations. The company stressed that the process will be carried out in accordance with local laws and consultation processes, with different timelines in different countries.
While the exact number of employees affected remains uncertain, FedEx assured that the job cuts will not affect customer service or delivery operations.