Logistics behemoth FedEx Corp. FDX has unveiled a plan to streamline its operations across Europe, aiming to reduce structural costs significantly.
The restructuring initiative targets reducing 1,700 to 2,000 positions, primarily within the company’s back-office and commercial teams.
The consolidation strategy involves eliminating several positions and merging teams to enhance efficiency within the affected departments.
FedEx expects the pre-tax cost of the severance benefits and legal and professional fees to be provided under and related to the plan to range from $250 million to $375 million in cash expenditures.
These charges are expected to be incurred through fiscal 2026 and will be classified as business optimization expenses.
FedEx foresees savings from the plan to be between $125 million and $175 million annually starting in fiscal 2027.
As part of the restructuring, FedEx plans to centralize certain functions into shared activity centers located in strategically chosen countries.
Richard W. Smith, chief operating officer, International and chief executive officer, Airline, Federal Express Corp, said, “FedEx is transforming to best match changing market dynamics and meet the needs of our customers.”
The restructuring process will adhere to European and local labor laws, with consultations set to occur on a country-specific basis. The timelines for these consultations will vary across the region, ensuring that all changes are communicated to affected team members.
“These are difficult changes for any business, and we have in the front of our minds our affected team members and their families,” said president of FedEx Europe, Karen Reddington.
“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.”
On Monday, the company said its Board of Directors approved an increase in the annual dividend rate on the stock by 10% to $5.52 per share for fiscal 2025.
Price Action: FDX shares traded higher by 0.97% at $254.88 premarket Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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