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 positions.

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 scratch.

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 costs.

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 [e-mail]

(END) Dow Jones Newswires

January 19, 2021 11:28 ET (16:28 GMT)

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