FedEx Plans to Cut Up to 6,300 Jobs in Europe -- Update
By Dave Sebastian
FedEx Corp. plans to cut up to 6,300 jobs in Europe as it
completes the process of combining its Express network with the
package-delivery operations of its TNT unit.
The delivery company said Tuesday that it will lay off between
5,500 and 6,300 workers in operational and back-office roles as it
seeks to address the overlap resulting from operating two European
networks connecting similar geographies.
The proposed cuts could affect up to 2.6% of FedEx Express'
roughly 245,000 employees, including about 43,000 at TNT, as of May
31, 2020. The job cuts will differ by country and could be in the
form of reassignment to other roles and priority access to open
FedEx said it expects severance-benefits costs of between $300
million and $575 million, before taxes, that are expected to be
incurred through fiscal 2023. The company sees savings of $275
million to $350 million annually beginning fiscal 2024 as a result
of the job reductions.
FedEx bought TNT, a Dutch company, in 2016. FedEx at that time
had a sizable air-express delivery operation in Europe, but it
lagged behind in the ground-delivery business. Acquiring TNT gave
it an established door-to-door network in Europe, saving the
U.S.-based company the time and money required to build one from
FedEx has faced a drawn-out integration of TNT, including a
setback from a 2017 cyberattack on its operations that disrupted
service and added hundreds of millions of dollars in extra
The company said it seeks to establish a dual-hub model in
Europe, with the FedEx Roissy-Charles de Gaulle hub serving as a
primary hub and the Liège location operating as a secondary one.
FedEx sees those two hubs, at the Paris's Charles de Gaulle airport
and Liège Airport in Belgium, as duplicate air networks.
"Moving towards a dual-hub model is a strategic advantage for
us: improving the competitiveness of our Express business,
providing us flexibility, and enhancing our growth opportunities,"
said Dave Canavan, operating chief of FedEx Express Europe.
Paul Ziobro contributed to this article.
Write to Dave Sebastian at email@example.com
(END) Dow Jones Newswires
January 19, 2021 11:28 ET (16:28 GMT)
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