to take up to $575 million charge as it starts voluntary buyouts
October 24, 2018
Mike Blake https://www.reuters.com/article/us-fedex-layoffs/fedex-to-take-up-to-575-million-charge-as-it-starts-voluntary-buyouts-idUSKCN1PC2LU
(Reuters) - FedEx Corp (FDX.N) 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 people.
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 trading.