FedEx to cut up to 2,000 jobs across Europe to slash costs

Posted by Admin June 13, 2024 Jobs

FedEx has announced a cut of up to 2,000 jobs across Europe in a bid slash costs.

The latest move by the parcel delivery giant will cost them up to £291.8million in redundancy payments and related expenses.

The Memphis-headquartered group revealed plans to cut its European back-office and commercial workforce by 1,700 to 2,000 over the next 18 months.

It employs nearly 50,000 people across Europe.

The job cuts, which are still subject to consultations, will help the company save between 125 million US dollars (£97.2million) and 175 million US dollars (£136.2million) a year, starting from 2026-27.

The group said the latest cost-cutting plans would see some roles axed and teams merged together in the affected back-office and commercial operations, while “certain activities performed across the region will also be consolidated to be located in select shared activity centres”.

The cuts will not impact customers or its delivery service.

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Although FedEx stand to make huge savings with the job cuts, it will initially cost them between 250 million US dollars (£194.5million) and 375 million US dollars (£291.8million) in redundancy payments and related expenses.

This follows last year’s announcement of a plan to restructure its delivery networks and save $4billion (£3.1billion) in costs by the end of 2024-2025, including $1.8billion (£1.4billion) in the year to the end of May 2024.

In March, FedEx announced that its workforce had shrunk by nearly 22,000 last year through job losses and staff turnover.

Richard Smith, chief operating officer of FedEx International, said: “Alongside the work we’ve done to optimise our networks, we’re taking necessary actions to streamline many of our functions to reduce structural costs while continuing to deliver outstanding service to our customers.

“We do not take these decisions lightly, but they are essential to putting FedEx on the right path for the future.”

Karen Reddington, president of FedEx Europe, said: “These are difficult changes for any business, and we have in the front of our minds our affected team members and their families.

“In line with our culture, we will conduct this process with the maximum support for those affected and in close consultation with our social partners.”

FedEx had in March raised its fiscal 2024 profit forecast, as cost cuts helped its earnings per share exceed market expectations.

FedEx operates in more than 45 countries and territories in Europe and employs over 52,000 people, according to its website.

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UPS has also implemented plans to reduce $1 billion in cost this year.

It said in January it would cut 12,000 jobs and explore strategic options for its volatile truckload brokerage business Coyote amid weak demand and overcapacity in the trucking industry.