FedEx will offer voluntary buyouts to employees

Washington DC
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FedEx is offering voluntary buyouts to US employees and says that the incentives will be rolled out "no later than the fourth quarter" of their fiscal year, which ends on 31 May 2013.

The Memphis-based cargo airline and shipping company says that it is using the voluntary buyouts to "reduce the cost structure of our staff support functions". It notes that this is one part of its comprehensive cost reduction program, which chief executive Fred Smith detailed on an investor conference call in June.

"While every FedEx operating company is constantly undertaking careful analysis of its cost structure, it is anticipated that the vast majority of employees eligible for these incentives will be US-based staff employees at FedEx Express and FedEx Services," says the cargo carrier.

FedEx says that it will provide more details about the buyouts during its investor meeting in Memphis in October.

FedEx says that it employs approximately 102,000 employees in its FedEx Express segment and 13,100 in the FedEx Services segment. These figures include both operational and staff support team members. The company says that the buyouts pertain to "mostly non-operational staff groups".

FedEx says that it is currently carrying out an analysis to work out which specific employee workgroups will be eligible for the buyouts and what the maximum participation levels will be.

Within FedEx's comprehensive cost-savings programme is a plan to re-align the carrier's fleet. The carrier accelerated the retirements of 18 Airbus A310-200 freighters and 26 related engines and six Boeing MD-10-10 cargo aircraft with 17 related engines in June. A majority of those aircraft were parked.

Last month, the operator announced that it would convert four Boeing 777-200LRF orders to Boeing 767-300ERF equivalent purchase value because international freight demand had not been as strong as expected since it originally ordered them.