Memphis-based shipping-giant FedEx is considered to be a bellwether of the global economy because it ships a cornucopia of goods all around the world. The voluntary buyouts for some FedEx Express employees are part of larger cost-cutting efforts at the company.
In a story that is now legendary, FedEx founder Fred Smith argued for the need for reliable, overnight delivery in a term paper he wrote at Yale. Smith built his company, which raked in $42.7 billion last year, on that idea.
FedEx Express is that company’s oldest and largest division. But demand for its services has shrunk recently, as the economy flagged and customers switched to cheaper, but slower, shipping options. In the past year, FedEx Express took 24 planes out of the sky. Then, the company announced a 34 percent decline in income last quarter, and said there would be more cost-cutting measures.
The buyouts for Express employees are the first of those. Some FedEx Service employees will also be offered voluntary buyouts. The Service division includes FedEx Office, which used to be Kinko’s.
FedEx will announce even more plans to save money this fall.