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- FedEx told staff it is in the process of laying off 10% of its officer and director team.
- The company has been on a cost-cutting crusade since the end of last year to rescue profits.
- Read CEO Raj Subramaniam’s letter to staff below.
FedEx is laying off more than 10% of its directors and officers as it continues to cut costs, the company told staff Wednesday.
“This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions,” wrote CEO Raj Subramaniam in a letter to staff, shared with Insider.
The company has more than half a million employees, but exact the number of layoffs was not specified. A former FedEx executive estimated that thousands are losing their jobs.
FedEx has been frantically cutting costs for the last several months, after the end of the pandemic e-commerce boom slowed revenue.
Subramaniam said FedEx cut an extra $1 billion at the end of last year, bringing the total expected cuts in this fiscal year to $3.7 billion. Most of the cuts are from FedEx’s Express business, which makes overnight and next-day time-definite deliveries. It also told delivery contractors there would be further cuts to costly Sunday service last week.
But today’s layoffs are across the entire company, and bring the cuts from the operations to the office.
The CEO said today’s cuts, along with some consolidation of teams within the company, are intended to ensure the company remains competitive and agile.
Read the full memo from CEO Raj Subramaniam to FedEx staff here:
Feb. 1, 2023 | To FedEx team members
As you know, we have embarked on a transformation effort to create the world’s most flexible, efficient, and intelligent supply chain for our customers. This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions.
Today we are in the process of informing a number of team members across our global enterprise that their positions have been eliminated as we reduce the size of our officer and director team by more than 10% and consolidate some teams and functions.
Saying goodbye to longtime colleagues and friends whom we value and respect is extraordinarily difficult. Unfortunately, this was a necessary action to become a more efficient, agile organization. It is my responsibility to look critically at the business and determine where we can be stronger by better aligning the size of our network with customer demand. While we have already taken many actions to that end, it was necessary to also look closely at the size of our leadership team and functions that could be consolidated.
I am sincerely grateful to those departing for the role they have played in building FedEx. We are committed to a transparent and supportive transition. Our HR team will be in touch with them today with information related to next steps including outplacement services, benefits, and severance compensation.
At FedEx, we have a rich 50-year history of evolving to meet the needs of a dynamic market. We have changed the way the world does business. I am equally confident in our ability to continue driving the world forward for the next 50 years and beyond.
Thank you for your commitment to our transformation.
President and Chief Executive Officer