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FedEx Corporation (NYSE:FDX) announced on Wednesday a workforce reduction plan in Europe as part of what it said is an ongoing effort to reduce structural costs in the region. The announcement was made through one of the company’s subsidiaries.
The package delivery giant noted that the execution of the plan is subject to a consultation process that is expected to occur over an 18-month period in accordance with local country processes and regulations. The plan will impact between 1,700 and 2,000 employees in Europe across back-office and commercial functions.
On the financial front, FedEx (FDX) expects the pre-tax cost of the severance benefits and legal and professional fees related to the plan to range from $250 million to $375 million in cash expenditures. Those charges are expected to be incurred by FDX through fiscal 2026 and will be classified as business optimization expenses. Looking further ahead, FDX expects savings from the plan to be between $125 million and $175 million on an annualized basis beginning in fiscal 2027. The company noted that the actual amount and timing of cost savings resulting from the workforce reduction plan are dependent on local country consultation processes and regulations and negotiated social plans and may differ from our current expectations and estimates.
Shares of FedEx Corporation (FDX) were up 0.18% in premarket action on Wednesday to $252.89. The dividend yield for new buyers of the stock is 2.00%.
