FedEx is taking “aggressive” cost reduction actions, including the closure of FedEx Office outlets in the US.

 

In a sombre statement, FedEx said that first quarter revenue of US$23.2 billion was $800 million below its previous forecasts. 

 

US$500 million of this related to the FedEx Express reporting unit, which was particularly impacted by macro-economic weakness in Asia and service challenges in Europe, the company said. The remaining US$300 million shortfall was from the FedEx Ground segment.

 

“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the US,” said CEO Raj Subramaniam, adding that the Q1 performance was “disappointing”.

 

With the company expecting business conditions to worsen in the coming weeks, it has announced a raft of cost-reduction actions. These include closing five corporate office facilities and more than 90 FedEx Office locations. It will also slash FY2023 capital expenditure by US$500 million.

 

The Office closures represent about five per cent of the total store network. The outlets – many of which were former Kinko’s copy centres – offer an array of print, copying and shipping products and services as well as an assortment of everyday office essentials.

 

FedEx’s share price tumbled by around 20 per cent in pre-market trading in mid-September.

 

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