Summary by Futu AI
On June 12, 2024, FedEx Corporation announced a significant workforce reduction plan for its subsidiary Federal Express Corporation (FEC) in Europe. The plan aims to streamline operations by reducing the headcount by 1,700 to 2,000 employees, specifically targeting back-office and commercial functions. This initiative is part of FedEx's ongoing efforts to reduce structural costs. The proposed changes, which are subject to local laws and consultation processes, are expected to incur pre-tax costs ranging from $250 million to $375 million, primarily for severance benefits and related legal and professional fees. These costs will be accounted for as business optimization expenses through fiscal 2026. FedEx anticipates annualized savings of $125 million to $175 million starting in fiscal 2027. The actual savings and the timeline for the workforce reduction may vary based on local regulations and negotiations. The announcement emphasizes that the service to FedEx customers will not be affected and that the company is committed to conducting the process with support for the affected employees, in compliance with European and local labor laws.