Fedex (NYSE: FDX) said it would cut 1,700 people. The announcement was made as part of the air freight company’s earnings release. The firm reported earnings of $1.20 per diluted share for the first quarter ended August 31, up 107% from $0.58 per diluted share a year ago. Revenue was up $9.46 billion, up 18% from $8.01 billion the previous year
FedEx will combine its FedEx Freight and FedEx National LTL operations effective January 30, 2011. This action will increase efficiencies and reduce operational costs.
The estimated cost of this program is $150 to $200 million, primarily related to charges that will be recorded in the second and third quarters of fiscal 2011. As a result of this combination, headcount is expected to be reduced by approximately 1,700 full-time employees and approximately 100 facilities will be closed.
Founder and CEO Frederick W. Smith made $7.4 million last year. It does not appear that he will take a salary cut or be laid off.
Douglas A. McIntyre
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