FedEx Corp. is starting an employee buyout program that will cost as much as $575 million before taxes, as the courier seeks to pare expenses amid a sudden decline in international business.
The voluntary buyout will yield annual savings of as much as $275 million, FedEx said in a regulatory filing Friday. The company is offering US employees four weeks of pay for every year worked as part of a cost-cutting initiative announced in December.
FedEx is contending with a surprise slowdown in business, which Chief Executive Officer Fred Smith blamed last month on “bad political choices" such as the US-China trade spat and the UK’s negotiations to leave the European Union. Smith said he was also planning to reduce overseas network capacity at FedEx’s cargo airline and cut the company’s discretionary spending to deal with lower demand.
The maximum payment under FedEx’s buyout is two years’ pay. The offer expires at the end of May.
FedEx climbed less than 1% to $177.26 after the close of regular trading in New York.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.