FedEx plans mass redundancies

Courier giant FedEx is planning to cut up to 14,000 jobs, more than a tenth of its US workforce.

The news came after FedEx warned that the rising cost of pensions and healthcare for its staff would make it undershoot its own earnings estimates.

The company said it hopes to cut the positions from its 116,000-strong US staff voluntarily through redundancy and early retirement packages.

The move could result in a one-off charge of $230m-290m (£140m-177m), but should save an estimated $150m-190m a year thereafter, it said.

Both management and salaried staff at FedEx Express, the company's US unit, are eligible for the buyouts, but pilots, customer services staff and couriers are not included.

Slowdown

With the world economy remaining "sluggish" and staff costs rising "significantly", FedEx said it could not keep to the targets it set itself without cutbacks.

The severance plans, said FedEx Express chief executive David Bronczek, "are yet another step in our ongoing process of reducing our cost structure". Staff have until 30 September to decide whether to sign up for the scheme.

FedEx Express ships about 2.8 million packages a day within the US, most of them for delivery the following day.

That number is down almost 7% on the throughput in 2000, although - in part, perhaps, because of the slowdown in human air traffic since 11 September 2001 - international air and ground shipments are on the increase.