Dive Brief:

• FedEx will enact layoffs at five facilities over the next few months, impacting 843 employees, according to Worker Adjustment and Retraining Notification (WARN) Act notices.
• Two layoffs involve FedEx Ship Centers as the company moves forward with its network consolidation plan for its Express and Ground units. The company will close the impacted facilities in Colorado and Ohio and shift some employees to nearby locations.
• Three layoffs involve FedEx Supply Chain, a company subsidiary that provides third-party logistics services. The cuts in Texas, Pennsylvania and Indiana are due to customers moving their business to other logistics providers.

Dive Insight:

FedEx said it is helping affected employees find other job opportunities within the company, including at other area facilities. In York, Pennsylvania, the delivery giant said it anticipates “there may be opportunities for FedEx team members” when the new 3PL is in place.

While FedEx linked the Supply Chain layoffs to customers’ decisions, the closures of the two Ship Centers are directly in the company’s control. FedEx said in a statement regarding the Ship Center closures that it makes adjustments in its network to meet evolving business needs.

“Each market is unique, and operational decisions such as this are based on a number of factors, including volume fluctuations, customer demand, facility footprints, and more,” the company said.

The company is trimming the number of stations and pickup and delivery routes in its network as part of its Network 2.0 initiative. For many U.S. locations, FedEx Ground contractors — rather than FedEx Express couriers — will deliver both Ground and Express packages, allowing the company to reduce operating costs.

The majority of employees impacted by the Colorado and Ohio closures are couriers, as is the case with previously announced Ship Center closures in Texas, Georgia and Mississippi.

The cuts are leading to a leaner FedEx. Its U.S. headcount declined by about 29,000 in FY 2023, which ended May 31, exceeding the company’s target, President and CEO Raj Subramaniam said on a June earnings call.

“We continue to aggressively manage headcount, including attrition to align our teams with the network changes underway,” Subramaniam said.

Read the full report here.