MEMPHIS, Tenn. — Memphis-based FedEx is laying off 10 percent of its global officers and directors as the shipping giant tries to reduce costs.
It’s not known is how many positions will be affected in Memphis, where the company employs some 30,000 employees at its corporate headquarters and world hub.
The company CEO says the layoffs are necessary to become “a more efficient, agile organization.” But they may hit hard in Memphis.
“It will have an impact,” said Memphis economist John Gnuschke, who said the move comes as no surpise to him.
“FedEx has a real need to remain profitable, and it’s doing it by cost cutting,” he said. “The layoffs, unfortunately for people who are laid off, are an important part of that cost-cutting process.”
The layoffs come at a time when shipping has slowed, and profits are smaller after the COVID pandemic and e-commerce boom. Late last year, FedEx shares plunged more than 22 percent amid news that the company had missed earnings expectations.
Economists at the time, including Gnuschke, felt Memphis would be safe from large-scale layoffs.
Gnuschke said he thinks there won’t be a large number of top-level layoffs in Memphis this year, though any losses would be a setback for the local economy.
And some believe FedEx corporate layoffs could actually spur more hiring, possibly benefiting the Memphis economy.
“What happens to FedEx really is important to Memphis, and keeping it profitable is an important way to make sure FedEx will always be a powerful contributor to the Memphis economy, Gnuschke said.
Wednesday’s announcement caused FedEx stock prices to rise.
WREG reached out to FedEx for a comment about the layoffs. They referred us to a news release from their president and CEO that says in part, the company has embarked on a transformation effort to create the world’s most flexible, efficient, and intelligent supply chain for its customers, and requires difficult decisions.
FedEx, based in Memphis since 1973, is a Fortune 100 company and is the largest private employer in the metro area. With revenue topping $69 billion, FedEx was the largest publicly traded company in Tennessee in 2021, according to Statista.