FedEx Express Offers Voluntary Retirement, Severance ProgramsFedEx Corp. said this weekthat its largest operating unit, FedEx Express, would offer voluntary early retirement and severance programs.
FedEx said it expects to save $100 million to $130 million in fiscal 2004 from the program. In fiscal 2005 and beyond, the estimated annual savings is projected at $150 million to $190 million.
FedEx said the move underlined the difficulties in the United States, its largest market.
"While FedEx Express international, FedEx Ground and FedEx Freight services are growing at impressive rates, the FedEx Express U.S. domestic growth rates have declined in recent periods," chairman and president/CEO Frederick W. Smith said in a statement.
Third-quarter volume announced in March showed that the domestic express average daily package volume declined less than 1 percent in the quarter.
The first program will offer an early retirement option with an enhanced pension package to salaried and management employees 50 or older who have five years of credited service. Employees have until Sept. 30 to take the option.
The voluntary severance plan is available to all salaried employees regardless of age or tenure. Workers have until Nov. 24 to decide.
FedEx hopes to reduce its work force of salaried and management employees by 14,000. The company employs about 116,000 U.S. workers. Both programs are limited to salaried staff employees at FedEx Express, and will not affect FedEx couriers, pilots and customer service agents, who are paid hourly.
"FedEx Express will maintain its industry-leading customer service because these programs do not affect customer-facing employees," FedEx spokesman Steve Barber said.