Correction: This story has been updated to clarify that the announced job cuts impact managers at the senior level.
- FedEx will cut more than 10% of its officer and director staff as the delivery giant contends with sinking demand, President and CEO Raj Subramaniam said in a message to staff Wednesday.
- In addition to the upper-level management cuts, the company will consolidate some teams and functions, Subramaniam said.
- The cuts will help FedEx become “a more efficient, agile organization,” Subramaniam wrote. “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.”
FedEx is in the midst of a $2 billion operational overhaul known as Network 2.0, which will consolidate portions of its network and eliminate certain delivery routes. Its latest cuts show that not even management will be spared as the delivery giant works to turnaround declining volumes.
“We have embarked on a transformation effort to create the world's most flexible, efficient, and intelligent supply chain for our customers,” Subramaniam wrote in his note to employees. “This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions.”
Plummeting demand in the second half of 2022 pressured FedEx performance, particularly during the critical holiday rush shipping period. The delivery giant has focused on boosting revenues per package to compensate for lower volumes.
FedEx has already taken other steps to rightsize its network in accordance with falling customer demand. In November, FedEx Freight, the company’s LTL unit, confirmed it enacted furloughs in some U.S. markets.
A spokesperson did not return a request for comment on which positions will be affected by layoffs.