Fedex starts a new round of layoffs, and will lay off more than 10% of middle and senior employees!

It is learned that according to foreign media reports, on February 1, US express giant FedEx announced that the company will lay off more than 10% of executives and directors to cut costs and cope with the economic recession and declining consumer demand.

In a letter to employees, FedEx CEO Raj Subramaniam said: "In addition to layoffs, the company also plans to merge some teams and departments. These necessary measures are to become a more efficient and agile organization. These measures will align the scale of FedEx's network with the needs of customers."

The latest round of layoffs brings the total number of layoffs at FedEx since June to 12,000, Subramaniam said. As of May, the company had 345,000 full-time employees, according to a regulatory filing.

Raj Subramaniam said the layoffs included "administrative staff", but he did not provide further details, such as how many middle management team employees were laid off.

FedEx's layoffs come as the pandemic dividend fades. During the large-scale outbreak of the epidemic, the package and logistics industry ushered in an explosion amid a surge in online spending. But as inflation continues and consumer spending is restricted, FedEx's package volume has dropped sharply and profits have plummeted. The company's stock price has fallen by about 20% in the past year.

After reporting a drop in sales and profits in the second quarter due to a drop in global freight volumes, FedEx announced it would cut more than $1 billion in costs by grounding aircraft and closing some offices. FedEx is reportedly aiming to cut a total of about $3.7 billion in costs in fiscal 2023.

Last September, FedEx also announced that in response to the impact of slowing demand, package rates will increase by 6.9% to 7.9% from January 2, 2023. In 2022, FedEx's US and international flight times will be reduced by a total of 13%.

Fedex's competitor UPS also expects "2023 to be a bumpy year." UPS recently announced its fourth-quarter financial results. The financial report shows that due to the decrease in package volume, UPS's total revenue in the fourth quarter was US$27.03 billion, a year-on-year decrease of 2.7%, which was lower than market expectations. UPS also predicted that its full-year performance guidance would also be lower than market expectations.

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