FedEx to offer buyouts to cut costs - Action News 5 - Memphis, Tennessee

UPDATE: FedEx to offer buyouts to cut costs

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MEMPHIS, TN -

(WMC-TV) – FedEx will offer voluntary buyout incentives to eligible employees in an effort to improve efficiencies and cut costs.

FedEx Corporation made the announcement Monday morning.

The buyouts will be offered to certain U.S.-based employees in the non-operational staff groups within FedEx.

University of Memphis business and economics professor Dr. John Gnuschke says FedEx is intelligently responding to a difficult global economy.

"This is the least harmful thing they could do," said Dr. John Gnuschke, University of Memphis business and economics professor. "Really, FedEx has kinda committed to not having layoffs per se, but using this mechanism to institute change."

It has not yet been determined exactly who will be eligible for the incentives, but FedEx is making the announcement now so that employees can begin planning.

Operational teams directly involved with handling and delivering FedEx packages will not be affected.

Support staff who works for FedEx Express and FedEx Services are subject to getting an offer. However, FedEx says it is analyzing each work function in a very specific and strategic manner before making any decisions.

The incentives will not make changes to retirement eligibility or payments. But people who are deemed eligible will be able to retire and accept the buyout.

"They're clearly trying to reduce costs, make some of their operations more profitable, compete," said Dr. Gnuschke.

A FedEx spokesperson told Action News 5 that the company is trying to better align costs and revenues in a people-oriented way. Already, the company announced it is retiring some aircraft and switching to more fuel efficient planes. They say voluntary buyouts are just the next step.

"They're a market driven company. They're extremely successful. They make changes within their company to address problems," said Dr. Gnuschke. "And it shouldn't surprise us that they make changes all the time because the market changes all the time."

More information will be released by FedEx at its Investors and Lenders meeting in Memphis on October 9.

Employees should begin learning who is eligible for a buyout by March 2013.

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