FedEx to take up to $575 mln charge as it starts voluntary buyouts
(Adds details on buyout program, company background, share
Jan 18 (Reuters) - FedEx Corp said on Friday it
could take as much as $575 million in charges as it began
offering voluntary cash buyouts to certain U.S-based employees
in a bid to reduce costs.
The parcel company announced in December that it would be
offering voluntary buyouts to ease pressure on profits that have
been hit by troubles in its express delivery unit and the
integration of European company TNT.
FedEx had said that the vast majority of its buyout offers
would be made to workers at the FedEx Express unit, which has
227,000 employees, and at FedEx Services, which employs 30,000
The company also slashed its 2019 forecast that month
blaming a weakening European economy and U.S. trade tensions
that exacerbated a slowdown in China.
The Memphis, Tennessee-based company said on Friday it
expects to incur charges of between $450 million and $575
million related to the buyout program predominantly in the
fourth quarter of fiscal 2019.
It expects employees to vacate their positions by the end of
fiscal 2019 and the program to save it between $225 million to
$275 million annually beginning in fiscal 2020.
FedEx did not announce how many jobs it seeks to cut, but
has said previously that it would extend similar voluntary
buyouts to international workers too.
FedEx employs more than 450,000 people around the world,
according to its latest annual filing. The company's shares
closed up 2 percent on Friday and were unchanged in after hours
(Reporting by Soundarya J in Bengaluru; Editing by Maju Samuel)
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.