FedEx laying off up to 2,000 workers in Europe to save $175 million a year

By Steve Gelsi

Package-delivery giant to shed back office workers

FedEx Corp. said Wednesday it's reducing its European workforce by 1,700 to 2,000 employees in a cost-cutting move to save up to $175 million a year.

FedEx (FDX) said it expects to incur costs of $250 million to $375 million for severance benefits and legal and professional fees.

FedEx estimated the cost-cutting moves would save at least $125 million and up to $175 million annually starting in fiscal 2027, mostly in back-office and commercial functions.

FedEx's stock fell 1.5% on Wednesday. The stock has fallen 1.7% so far in 2024, compared to a 13.7% gain by the S&P 500 SPX,

The Memphis-based package-delivery giant said the plan will require an 18-month consultation process under local labor regulations.

It will start taking charges for the staff-reduction costs in its quarterly results and continue the disclosures through fiscal 2026.

FedEx said in its most recent quarterly update in March that the business-to-business environment remained challenging in Europe, and that it was planning to pursue "further profit optimization opportunities."

FedEx disclosed a total of 529,000 part-time and full-time employees globally as of May 31, 2023, in its annual report, including about 328,000 permanent workers and 201,000 part-time people.

FedEx Express's European business spans more than 45 countries and territories via 28 transit hubs and 700-plus stations.

The company paid $4.8 billion to acquire TNT Express in 2016 to boost its presence in Europe, the Middle East and Asia.

In 2022, it finished up the physical network integration of TNT Express into FedEx Express and consolidated flights into its Paris hub.

Also read: FedEx raises dividend 10%, but the new yield is less than half that of rival UPS

-Steve Gelsi

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06-12-24 1646ET

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