UPDATE 2-FedEx to offer voluntary buyout to U.S. employees
* FedEx to offer staff buyouts in latest cost-cutting drive
* FedEx Express, FedEx Services to bear brunt of cuts
* To offer incentive package around March 2013
By Megha Mandavia
Aug 13 (Reuters) - FedEx Corp is to offer some U.S.-based employees voluntary redundancy as tough times hurt shipping volumes and customers demand cheaper delivery options.
The job cuts follow a warning from the company in June that it needed to cut costs in the face of the European debt crisis and slowing growth in Asia.
FedEx said it expects the vast majority of those eligible for the voluntary layoffs to be staff employees at its FedEx Express and FedEx Services businesses.
Incentive packages will be probably offered around March next year, said spokeswoman Shea Leordeanu, but she declined to give more details on the number expected take up the offer.
FedEx, which competes with United Parcel Service, said the incentives will be offered to mostly non-operational staff groups and it expected to provide more details at an investors and lenders meeting on October 9 and 10.
The massive volume of goods moved by FedEx makes its shipping trends a closely watched indicator of consumer demand and economic growth.
FedEx shares dipped 0.75 percent on Monday but Justin Yagerman, an analyst with Deutsche Bank, said the job cuts were a short-term positive.
"We expect at least $150 million, or 30 cents a share, of annual cost tailwinds from FDX's U.S. domestic restructuring and our sense is that the cost savings will likely be materially higher following this morning's press release," he said.
Shares of Memphis, Tennessee-based FedEx, trading at $87.14 on Monday on the New York Stock Exchange, have fallen 8 percent in last 6 months.
- Tweet this
- Share this
- Digg this
- Malaysia military tracked missing plane to west coast - source
- Rupee retreats from 7-month high as shares fall
- India halts plan to join global bond indexes, defers Euroclear - sources
- WRAPUP 5-Malaysia military tracked missing plane to west coast-source
- Exports fall in February, may miss annual target