FedEx cutting officer and director team jobs by more than 10%, CEO says

FedEx Corp. President and CEO Raj Subramaniam said the company is reducing the size of its officer and director team by more than 10% and “consolidating some teams and functions” in a memo to its team members on Wednesday.

This is FedEx’s latest cost-cutting measure following disappointing first and second quarter reports in September and December, respectively, as it seeks to readjust to the current economic issues that have impacted the company in recent times.

Subramaniam said FedEx was in the process of informing team members across the globe that their positions were eliminated.

“Saying goodbye to longtime colleagues and friends whom we value and respect is extraordinarily difficult,” he wrote. “Unfortunately, this was a necessary action to become a more efficient, agile organization. It is my responsibility to look critically at the business and determine where we can be stronger by better aligning the size of our network with customer demand. While we have already taken many actions to that end, it was necessary to also look closely at the size of our leadership team and functions that could be consolidated.”

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FedEx has recently suffered from low volume and high operating costs, which has led it to look for cost-cutting opportunities.

FedEx announced its first round of cost-cutting measures in September with plans to save $1.5 billion to $1.7 billion at FedEx Express, $350 million to $500 million at FedEx Ground, and $350 million to $500 million in other overhead expenses.

In December, FedEx said it identified another $1 billion in potential cuts. In a news release at the time, Michael C. Lenz, FedEx executive vice president and chief financial officer, said the company had "an unwavering focus" on cost cutting.

“As we look to the second half of our fiscal year, we are accelerating our progress on cost actions, helping to offset continued global volume softness,” Lenz said.

Another cost-cutting move FedEx has announced was FedEx Freight furloughing employees in November to make up for slow demand. Other steps the company has taken recently are closing some FedEx Ground sort facilities and making adjustments to FedEx Express’ flight network.

FedEx plans to cut potentially $3.7 billion in costs this fiscal year.

FedEx declined to tell The Commercial Appeal how many employees would be impacted by Wednesday’s news and offered the following statement in addition to Subramaniam’s memo:

“Since the start of our fiscal year in June 2022, our U.S. headcount has been reduced by more than 12,000 positions through attrition and headcount management initiatives. We will continue responsible headcount management throughout our transformation.”

The company has an estimated 600,000 team members worldwide, according to its website.

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FedEx also did not immediately respond to questions about the impact on Memphis, if additional cuts are possible or impact on the company’s payroll.

Subramaniam added FedEx’s human resources team will be in touch with those who have lost their jobs and provide information related to next steps including outplacement services, benefits, and severance compensation.

“At FedEx, we have a rich 50-year history of evolving to meet the needs of a dynamic market. We have changed the way the world does business,” he wrote at the end of his memo. “I am equally confident in our ability to continue driving the world forward for the next 50 years and beyond. Thank you for your commitment to our transformation.”

Commercial Appeal reporter Corinne S Kennedy contributed to this report.

Omer Yusuf covers the Ford project in Haywood County, FedEx, tourism and banking for The Commercial Appeal. He can be reached via email Omer.Yusuf@commercialappeal.com or followed on Twitter @OmerAYusuf.

This article originally appeared on Memphis Commercial Appeal: FedEx cuts officer and director team jobs, CEO Raj Subramaniam says