Business News
FedEx cuts costs as earnings come under pressure
Dec 18, 2008, 15:59 GMT
New York - FedEx said Thursday it would trim salaries and take other cost cutting measures as the economic recession cuts into business at the second-largest US package shipper.
The announcement came as FedEx said earnings rose 3 per cent to 493 million dollars in the company's second quarter that ended in November. Revenue rose 1 per cent to 9.5 billion dollars, the smallest increase in nine years amid what chief executive Frederick Smith called the 'some of the worst economic conditions' in the firm's 35-year history.
The earnings were thanks in part to cuts made earlier this year that eliminated 1,100 jobs.
Salaried employees at FedEx will see salaries cut by 5 per cent in January, with senior executives facing cuts of up to 10 per cent and Smith lowering his own compensation by 20 per cent.
Package volume inside the United States fell 8 per cent in the second quarter and international deliveries fell 7 per cent, FedEx said.
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