FedEx Inc (FDX.N) will outline its strategy to save $4 billion in permanent expenses by fiscal 2025 on Wednesday.
Last month, FedEx executives indicated they were on target to accomplish $1 billion in permanent cost reduction this fiscal year ending May 31, putting them on track to meet their 2025 objective.
FedEx Express, which delivers next-day and generates the most income, has saved the most. FedEx has stored Express jets, scrapped MD-11s, and laid off 10% of executives and directors to cut expenses.
The firm, which competes with direct competitor United Parcel Service (UPS.N) and Amazon.com’s (AMZN.O) burgeoning delivery operation, is rushing to minimize expense that has pushed profitability as demand for deliveries cools and global recession approaches.
Express operating profit decreased to 1.2% from 4.6% in the quarter that ended Feb. 28, despite better-than-expected cost management.
“The volume and broader economic prospects remain uncertain, and timing for execution of the balance of the company’s cost reduction measures is still a bit foggy,” Stifel analyst Bruce Chan said in a client note last month.
Comment Template