LOS ANGELES Reuters -- FedEx Corp will lay out the next steps in its plan to slash $4 billion in permanent costs by the end of fiscal 2025.
The Memphis, Tennessee-based package delivery company said last month that they were on track to hit $1 billion in permanent cost cuts this fiscal year ending May 31 - a move that puts FedEx well on its way to its 2025 goal.
Most of the cost savings come from FedEx's Express division that offers next-day delivery and contributes the largest share of company revenue. FedEx parked Express planes, retired older MD-11 aircraft and laid off 10% of officers and directors to reduce costs.
As demand for deliveries cools and the global recession threatens, the company is trying to reduce overhead that has pressured profits, as it competes with United Parcel Service and Amazon.com's growing delivery operation.
Even with better than expected progress on cost controls during the quarter that ended February 28, the Express operating margin fell to 1.2% from 4.6% the year earlier in the year.
Stifel analyst Bruce Chan said last month that the volume and broader economic outlook remain uncertain, and timing for delivery of the rest of the company's cost savings initiatives is still a bit fuzzy.