By Sloan T. Wilson, The Chicago Times
December 22, 2022
MEMPHIS, TN – Shipping giant FedEx announced Tuesday it plans to cut $1 billion more in costs after further weak demand diminished quarterly profit.
FedEx executives said Tuesday it will be able to cut another $1 billion beyond what was announced last September bringing the total fiscal 2023 savings to $3.7 billion. Last September, FedEx had announced that severe cost cutting measures would have to be implemented to meet the coming global recession. The latest cuts will come from FedEx’s Express unit along with adjustments to Ground unit operations. Additionally, FedEx Flight Operations has reduced U.S. domestic flight hours by 6% and international flights by 7% for the year.
“Our teams have an unwavering focus on rapidly implementing cost savings to improve profitability. As we look to the second half of our fiscal year, we are accelerating our progress on cost actions, helping to offset continued global volume softness.” CFO Mike Lenz said in an earnings release.
FedEx’s latest earnings showed strong weakness in its Express unit which showed a 64% decrease from the previous year. However, FedEx Ground operating income rose 24% from last year while freight operating income increased 32% year over year.