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FedEx to Eliminate Up to 2,000 Jobs in Europe

Daniel Kim Views  

FedEx is reducing its workforce due to a lower cargo demand in Europe.

On the 12th, FedEx announced plans to cut between 1,700 and 2,000 back-office jobs in Europe as part of its recent cost-cutting efforts due to a decline in cargo demand.

According to the statement, the reduction will take place over 18 months. It is expected to incur pre-tax costs between $250 million and $375 million due to legal expenses and severance pay.

The company also forecasted cost savings of between $125 million and $175 million annually starting from the 2027 fiscal year.

FedEx’s largest division, the air-based express business, has seen slower growth in cargo demand. To increase profitability, FedEx has embarked on cost-cutting measures.

As part of a plan to restructure its delivery network and enhance capacity, FedEx outlined a cost-saving plan of $4 billion by the end of the 2025 fiscal year, including $1.8 billion in the 2024 fiscal year.

In response, a Deputy Research Director at CFRA Research Stewart Glickman analyzed, “This shows that FedEx is still struggling in a macroeconomic recovery situation.”

Glickman added, “Both Europe and the U.S. are struggling to increase volume, and at present, cost-cutting is the lever that can cooperate.”

In March, FedEx raised its earnings forecast for the 2024 fiscal year as earnings per share exceeded market expectations due to cost savings.

FedEx operates in over 45 European countries and territories and employs more than 52,000 people.

Daniel Kim
content@viewusglobal.com

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