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FedEx closes offices and freezes hiring as global delivery numbers drop

By Hugh Fort in US business news, posted September 18, 2022

FedEx has revealed it is closing offices and freezing hiring after a drop in the number of packages being sent around the world.

The Wall Street Journal reports the delivery giant's quarterly revenue has fallen below its expectations.

Chief Executive Raj Subramaniam, who has been in post since June, said he is making cost-cutting decisions.

This includes freezing hiring, closing 90 FedEx office locations, parking some of its cargo aircraft, reducing operations on Sundays, and closing five corporate offices.

He did not confirm whether jobs would be cut.

The company is also facing calls from some of its contractors that deliver its packages to help them with higher fuel and labor costs.

FedEx says weakness in Asia and challenges in Europe led to a revenue shortfall of $500 million compared with its forecast.

Results for FedEx Ground were about $300 below company forecasts.

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Satish Jindel, president of research firm SJ Consulting Group, said: "People are buying less. They are paying more for air travel and other experiences."

"It's going to be hard to make up the volumes for the rest of the year."

He added he doesn't expect the average daily parcel volume in the coming peak delivery season to exceed last year's.

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