FedEx plans to cut between 1,700 and 2,000 back-office jobs in Europe, in its latest push to cut costs as the parcel delivery giant combats a slump in freight demand.
The cuts will be spread over 18 months and would result in a pretax cost of $250 million to $375 million related to legal fees and severance benefits, FedEx said.
The downsizing will help save between $125 million and $175 million a year from fiscal 2027.
Faced with soft freight demand and slow margin growth in the air-based Express unit, its largest segment, the company has embarked on cost cuts to boost profit.
“Alongside the work we’ve done to optimize our networks, we’re taking necessary actions to streamline many of our functions to reduce structural costs,” the company said.
The Memphis-based firm had outlined plans to cut $4 billion in costs by 2025 end, including $1.8 billion in fiscal 2024 ended May.
FedEx, rival United Parcel Service and other delivery companies saw a boom in demand during the early days of the pandemic when home-bound consumers shopped online.
But as travel and dining resumed that trend reversed and was also exacerbated by higher inflation.
UPS has also implemented plans to reduce $1 billion in cost this year. It said in January it would cut 12,000 jobs and explore strategic options for its volatile truckload brokerage business Coyote amid weak demand and overcapacity in the trucking industry. In March, FedEx raised its fiscal 2024 profit forecast, as cost cuts helped its earnings per share exceed market expectations.
FedEx operates in more than 45 countries and territories in Europe and employs over 52,000 people, according to its website.
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