Skip to comments.Fedex to cut thousands from workforce
Posted on 10/11/2012 4:26:03 AM PDT by Mad Dawgg
AFP - Fedex, the global delivery company, said Wednesday it was planning to cut "several thousand" people from its workforce via a voluntary departure program beginning early next year.
Company chairman Fred Smith said at an investment conference in Memphis, Tennessee, that the cuts would come in the company's Fedex Express global express delivery service, and in the US unit, Fedex Services.
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This will help unemployment numbers go to under 4.0%!!! Huraaay!
“Those evil corporations are doing something corporate with their corporate mindset.” - old South Park episode
Wow Fred Smith is still CO?? One of my first jobs in 1980 was working for Fedex, but back then it was called the full name Federal Express. I remember he came to our branch one day and gave a speech and told us when he was trying to start the company he was short some money so he went to Vegas and won the extra cash LOL! Great guy and a great company. I remember when I left I was making something like $16 an hour and time and a half for OT and that was back in 1984 which was a fortune back then especially for a non-union job, but sadly it seems Obamanomics has put this company on the spot.
well since UPS didnt build that, maybe bambam can shovel a couple billion into solar powered aircraft...wait, what ???
You can bet, even though it’s never mentioned, FedEx accountants have “run the numbers” on Obamacare.
More of the obama economy. Of course hussein will claim to have saved several thousand jobs that FedEx didn’t cut. The workers that are cut well be unceremoniously dropped from accounting, and the unemployment percentage well be lowered. Not a joke, that’s how it goes down in obamaland.
Good analysis. Internet sales taxes are slowing becoming reality and will cut into the online bushiness models so will reduce deliveries by FedEx
If it’s the Express side, It’s voluntary, meaning they will probably offer early retirement deals. They have done this before.
OTOH, if Romney wins and truly exhibits his intent to get our economy with results in congress, we'll be seeing an astounding amount of new hiring by 2nd quarter next year.
No doubt the Oct. employment number will find that these ex-Fed-Ex workers have dropped out of the workforce. The percentage of unemployed will be down to 7:5% right before Election Day....another miracle courtesy of the BLS. (To be accurate, they should drop the “L”.)
The only way to be rid of this O-hole if it is re-ordained, will be if it abdicates.
Also, aren’t Walmart and Amazon doing same day delivery now? Seeing as how those stores have their own businesses in every major city, it seems they can bypass freight alltogethor.
A lot of Amazon shipping is done by a delivery service that employs independent contractors who (I presume) own their own vehicles. I was outside the other day when one came by and gave me the package. His van was not FedEx or anything
So Amazon tries to cheap out by bypassing UPS, FedEx etc
The real problem is e mail
Yesterday I transmitted a large report via Fedex. I discovered it was the first such transmission in two years. Such transmissions were several a week years ago but now all is scanned and emailed. This report contained original documents that had to be saved.
The rise of e mail/scanner usage has saved my client very big bucks by eliminating physical (Fedex) transmittal.
The global economy has hurt FedEx, but so has Obama's mess. While there is still a need for original documents/original signatures, a good portion of the overnight document delivery service can now be handled via computer data transfers. Online purchases by consumers are down, which also means inventories don't have to be replenished as often. Another big bottom-line issue is the modal shift from overnight to deferred. People aren't paying the higher premium rates; instead, they can wait another day or two for it to get there later, and more cheaply. A good bit of the Express volume has moved to FedEx Ground, so FDX is still keeping some of the volume, but at a lower margin.
Another factor is FedEx self-funds their health insurance, which is administered by one of a few companies depending on one's state of residence. The administrative & cost nightmare that is Obamacare surely doesn't help the bottom line, either.
Fred Smith has generally been kind to Obama with his public comments. I wouldn't call him an O-bot, but some of his remarks have caused me to shake my head.
Anytime you want to know how the economy is doing, simply look at what FedEx, UPS and the cardboard industry looks like. They are great economic indicators.
FedEx is currently contracted to move the post office’s overnight mail from city to city. That’s a not-small chunk of change - and Obama could screw them out of it.
I'm not kidding. Last year I ordered a new Fender Blacktop Jaguar HH on Dec 23rd about 2:30pm, it came Dec 24th!. Made my Christmas!
The longest I've waited is two days with them and FedEx. When I ordered my new Fender Squier CV 50's Strat earlier this year(1). I asked my Sales Engineer to have their Techs double check the factory setup especially the intonation. That delayed shipping overnight.
(1) I wanted a 'knock around' Strat so I didn't have to get out my baby when the grandkids are around (Candy Apple Red 86' Fender Strat w/ Flyod Rose Tremolo). That happened once and 'somehow' it got knocked out of its stand. No damage, it fell on the carpet -- thankfully.
-——the cardboard industry——
For many years, until recently, I visited a company that makes photosensitive plastic plates used to print cardboard boxes. They ship their products literally all over the world. They have a strong export business.
The number of my visits was tied to orders of several export customers.The number of unshipped pallets on the dock was an indicator of their current sales volume. As goes the box printing business so goes the world economy.
“For many years, until recently, I visited a company that makes photosensitive plastic plates used to print cardboard boxes.”
Again, you are correct, no sales, no product, no boxes, no printing = Obama’s “get even with them” economy.
[I discovered it was the first such transmission in two years.]
Back in the dark ages, circa 1990, I worked in the document control department of a company that was coordinating the engineering and simulatneous construction of a half dozen coal fired co-generation power plants.
We sent big heavy packages of D size drawings to each site every night. Lots of business for Fedex.
Things have changed greatly since then.
Now pretty much my only contact with Fedex is when they deliver goodies I’ve ordered for my 4x4 and other toys from NAPA or whatever remote boneyard I can find what I need at.
A few months ago some investors were saying FedEx’s expected activity level indicated slowing growth in the next couple of quarters.
What does it mean when FedEx gets out the pink slips?
That is basically what I did and still have a small part of. I took a thumb drive to the inspection site and they loaded it with documents and reports.
It is amazing really the work that can be done so quickly when organizations a world apart get to know each other on a one to one basis and the e mails begin to fly.
"Hard-copy messaging" accounts for about 6% of FedEx total revenue
Good analysis. Deferred shipping has really created a dynamic two tiered market. If you choose 4-8 day shipping v. next day or 2-day the savings is significant, but there is a significant benefit to the delivery company. Now they can segregate deliveries and if they have room to transport your deferred delivery you may get it in less than 4 days.
Their biggest cost is labor and the labor burden. If you can manage that effectively that’s where you’ll cut. This is the challenge of the 21st century. Millennials and frankly all of us are going to face an ever more competitive market. That means we’ll all slowly become entrepreneurs, self-employed or small jobbers working on contracts.
This will really change the labor market dynamics, our economy and our politics. Licensing and permitting keeps many people out of the workforce unnecessarily. Those states and localities that recognize this and liberalize their regulatory regimes will gain massively. People need to work to live.
If you can work anywhere you’ll see a move toward leasing and flexibility. That was the way things used to be with very flexible wages and prices. When a bust happened in the US it wasn’t as painful because although your wages fell X%, so did prices. We’ve lost that flexibility through government regulation and a pro-debt (read pro-bank) tax policy.
All this is set to change in the near future. If the choice is between a government handout, economic failure or a job the only sustainable choice is a job. The first two are what cause income inequality by creating an economically successful political class that manipulates the laws and thus the economy to their private benefit. That’s the case in the 3rd world where you find high poverty and entrenched oligarchies.
Recently, in addition to the “regular” deliver services, I’ve been getting stuff by people in unmarked cars and the invoice said “A1 Courier” or something like that. Things seem to come quicker when they’re involved so I have no objections.
FDX's earnings call was pretty dire in it's warning of a sharp slowdown of global economic growth. For those that don't know FDX has a full global economic forecasting unit and they are quite good at it.
His whole office division was moved to Poland where Polish workers and a new building are up and running.
How about them apples, or should I say....peirogis?
The visibility of the FDX brand name & convenience of shipping will take a hit with that move, though the bottom line is probably that FedEx wasn't getting the volume from these dropboxes to make it financially feasible any longer.
It’s a PITA and expensive to drive around looking for some item at the store vs. purchasing online. Even with sales tax
one saves time, hassle and gas.
Coming into the Christmas season?
That’s usually when UPS & Fedex hire extra people.
It was my understanding that the USPS contract wasn’t up until September 2013.
True, that’s not good, not good at all!
Because the economy is doing so well under 0bambi.
Two different & separate contracts.
I gave them nearly 18 years of my life. One of the best companies. Though I didn’t agree with their management programs, I still loved the union-busting attitude of Fred Smith. I had a blast and am sad to hear of this news. - They are only as busy as the economy is busy. Go away B.Zero!!
That's the Amazon situation. My guess is Amazon is powerful enough to have FedEx and UPS ship to a city warehouse (say for Cleveland) where Amazon sorts the packages and has them delivered in Cleveland by Amazon's contactors... couriers/package delivery guys. Amazon also uses straight FedEx and UPS and USPS
Already you have the USPS partnering with FedEx and UPS to deliver packages. For example FedEx takes it half the way to Montana (say Chicago) then the USPS takes it the rest of the way and delivers it in a rural area where the USPS has better infrastructure
Yup. Fred is very loyal to the Express side (aka the "air side" the original Federal division that built the company), and they have never had an involuntary lay-off in this group, though they have sometimes made it very attractive for people to voluntarily leave
---ex-FedExer, currently being paid every month to not die.