New York (awp / afp) – FedEx, which had already warned that it had transported fewer letters and packages than expected this summer, said Thursday that it wanted to reduce its annual expenses by 2.2 to 2.7 billion dollars, in order to maintain its profits.
The group also plans to increase all its prices by at least 6.9% on average next January 1, after having already raised them by at least 5.9% at the beginning of this year.
FedEx shares, which lost more than 21% after the group warned last week that its performance in the three months to the end of August would be worse than expected, gained 0.8% on Thursday. The group, in a very unusual way, published its results during the session.
Its turnover over the period under review was up 5%, at 23.2 billion dollars. Its net profit, however, fell by 21% to 875 million.
FedEx had warned that after taking advantage of the surge in online commerce since the start of the pandemic, the slowing economy and operational difficulties had led to a reduction in the volumes transported.
Since the beginning of the year, the group has succeeded in offsetting this drop by raising prices. But the situation has deteriorated in recent weeks.
“We are acting with speed and agility to navigate a challenging operating environment, acting across cost, commercial and capacity to adapt to the impacts of reduced demand,” said Raj Subramaniam, the CEO of the company, in a press release. Arrived on June 1 at the head of the company, he replaced the boss and founder Frederick Smith.
The group expects to make savings as of this financial year, which ends at the end of May 2023 for FedEx, in particular by reducing the financial incentives granted to employees.
The group also wants to reduce the frequency of its flights, close establishments, suspend certain operations on Sundays and postpone certain projects.
In addition to these short-term actions, FedEx wants to reduce its annual expenses by 4 billion dollars by 2025.
afp/rp