FedEx to outline cost reduction plans for fiscal 2024, 2025
Steps the company has taken include parking Express planes, retiring older aircraft and more than 10% of its officer and director roles
FedEx Corp plans to continue its cost reduction strategy for the next two years.
The package delivery company will lay out the next steps on Wednesday to slash $4 billion in permanent costs by the end of fiscal 2025.
Executives said last month that they were on track to hit $1 billion in permanent cost cuts this fiscal year ending May 31 - putting FedEx well on its way toward its 2025 goal.
Those cost savings have come mostly from FedEx's Express division that offers next-day delivery and contributes the largest share of company revenue.
FEDEX CUTTING OVER 10% OF MANAGEMENT ROLES
Side view of Fedex Ground shipping truck in San Ramon, California. (Smith Collection/Gado/Getty Images / Getty Images)
Among other things, FedEx has parked Express planes and retired older MD-11 aircraft.
In February, the company announced it was shedding more than 10% of its officer and director roles while working to consolidate other teams and functions.
Those job cuts came after FedEx announced in December that the company is prioritizing actions to quickly reduce costs in order to align fiscal 2023 costs with weaker-than-expected volume.
A FedEx airplane is loaded at the global hub in Memphis. (Madison Scarpino / Fox News / Fox News)
FEDEX CLOSING STORES, OFFICES, DELAYING HIRES, PULLS FORECAST
The company is racing to reduce overhead as it competes with United Parcel Service and Amazon's growing delivery service.
FedEx is feeling pressure as deliveries cool and a global recession threatens.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORP. | 288.11 | -5.00 | -1.71% |
| UPS | UNITED PARCEL SERVICE INC. | 132.07 | -1.13 | -0.85% |
| AMZN | AMAZON.COM INC. | 202.88 | -1.73 | -0.85% |
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Even with better-than-expected progress on cost controls during the quarter that ended Feb. 28, Express operating margin for that period fell to 1.2% from 4.6% the year earlier.
Reuters contributed to this report.