MEMPHIS, TN (WMC) - As global trade slows down, Memphis-based FedEx is releasing a plan on how to make up the costs--which includes a voluntary employee buyout.
We're nearing the end of one of FedEx's busiest times of year, but as the company looks to 2019, it notes slow international business and is releasing ways it will cut costs next year.
In its corporate second quarter results, FedEx said it plans to reduce international network capacity at FedEx Express, limit hiring, and reduce discretionary spending.
A FedEx spokesperson said in a statement that revenue was up $1.5 billion during the second quarter year over year.
However, chairman and CEO Fred Smith noted the changes.
“While the U.S. economy remains solid, our international business weakened during the quarter, especially in Europe. We are taking action to mitigate the impact of this trend through new cost-reduction initiatives,” Smith said.
He went on to blame the changing political landscape for the financial changes within the company.
“I’ll just conclude by saying most of the issues that we’re dealing with today are induced by bad political choices,” Smith said. “I mean, making a bad decision about a new tax, creating a tremendously difficult situation with Brexit, the immigration crisis in Germany, the mercantilism and state-owned enterprise initiatives in China, the tariffs that the United States put in unilaterally. So you just go down the list, and they’re all things that have created macroeconomic slowdowns.”
CNBC noted a 10 percent drop in FedEx stock after his comments.
Click here to see the results of FedEx’s second quarter report.