FedEx will soon begin offering buyouts to U.S. employees in an effort to cut costs in the face of a weakening global economy.
The world's second-largest package delivery company hinted at cutbacks earlier this summer when it said that slowing economic growth would crimp its earnings well into next year. It has already removed some aircraft from its fleet of more than 600 to account for a loss of demand.
While FedEx hasn't yet decided how many positions will be eliminated, it will likely focus on slow-growth areas like its Express and Services units.
Express is where FedEx got its start in 1971, and it's still the company's biggest segment by far. The speedy shipping division, which moves 3.5 million packages on an average day, has been hit hard as people shift to slower delivery methods to conserve cash. The unit is also being dragged down by slowing Asian growth and a reduction in demand for Asian goods from the United States and Europe. The unit reported revenue of $26.5 billion in the latest fiscal year and has more than 146,000 employees worldwide -- 102,000 of those in the United States.
Services is FedEx's behind-the-scenes logistics division, but it also includes FedEx Office, formerly Kinko's. It was formed in 2000 and with annual revenue of $1.7 billion in 2012, is one of FedEx's smallest units. It has 13,000 employees, all of whom are U.S.-based.
Quarterly results released in late July by larger rival United Parcel Service Inc. suggested that the global economic slowdown may be even worse than FedEx anticipated.