© Typhoonski
FedEx is planning to shed between 1,700 and 2,000 posts among its workforce in Europe – “part of ongoing measures to reduce structural costs”.
The redundancies focus on removing positions and consolidating teams in back-office and commercial functions, and will be subject to local law and consultation processes, the Memphis-based logistics giant said.
Certain activities across the region will also be consolidated and located in select shared-activity centres in countries best aligned with the company’s needs and the existing FedEx real estate footprint, it added, while underlining that the cost-cutting moves would not affect the quality of customer services.
The Loadstar approached FedEx’s European HQ in the Netherlands for more information about the job cuts, notably where, geographically, they would be implemented, but no one was immediately available to comment.
Richard Smith, chief operating officer, international, and CEO airline, Federal Express, said in a statement: “FedEx is transforming to best match changing market dynamics and meet the needs of our customers.
“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.”
Its biggest unit, FedEx Express, which has its European air hub at Paris-CDG Airport, is contending with soft demand as macro-economic recovery stalls, translating into slow margin growth.
In 2022, FedEx completed the integration of TNT’s air network, creating 1,000 jobs as it moved to CDG, but with heavy job losses at TNT’s hub in Liege, Belgium. FedEx said at the time the air network integration would bring benefits of between $75m and $100m by fiscal year 2025.
FedEx Express is thought to have in excess of 50,000 team members across 45 countries and territories in Europe, and an operational network comprising more than 750 weekly flights serving almost 70 European airports, among them its main hubs at Paris-CDG and Liege. It also has extensive road operations across the continent, with 540 depots and more than 55,000 ground connections weekly.
According to a report by Reuters, quoting FedEx, the redundancies in Europe will be spread over 18 months and result in a pre-tax cost of $250m to $375m in legal fees and severance benefits. The downsizing will help save between $125m and $175m a year from fiscal 2027.
FedEx had previously outlined plans to cut $4bn in costs by the end of fiscal 2025, including cutting $1.8bn in fiscal 2024, part of a plan to restructure delivery networks and rein-in capacity. Its fiscal year begins on 1 June and ends 31 May.
Last month, it came to light that FedEx Freight, the less-than-truckload unit of FedEx Corp, is planning to close seven service centres across the US this year as it makes alignments to its freight network.
News of the redundancies in Europe followed an announcement this month that Karen Reddington, FedEx’s regional president, Europe, will retire on 30 June, handing over to Wouter Roels, SVP, marketing and customer experience, Europe. Ms Reddington, who has been in the post since 2020, will take on an advisory role and remain with the company until the end of the year.
FedEx will release its Q4 and full-year 2023/24 financial results on 25 June.