New Delhi

FedEx is laying off Europe-based workers because of reduced demand. 

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The delivery giant is laying off 1700-2000 back-office workers. This development comes as part of a general effort aimed at reducing costs while making more money amid economic turmoil.

The layoffs are expected to take place over the next 18 months. They will result in pre-tax costs of $250 million to $375 million related to severance benefits and legal fees. FedEx anticipates these cuts to generate annual savings of $125 million to $175 million. These savings will start in fiscal 2027.

This decision comes amid a slowdown in the global shipping industry. The surge in online shopping during the pandemic led to a boom. This benefited FedEx and other delivery companies. However with the easing of lockdowns and restrictions consumer behaviour has shifted. This shift has led to decline in demand. Demand for delivery services has dropped.

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FedEx is not alone in facing these challenges. The Memphis-based company is part of a growing trend of businesses implementing cost-cutting measures. They aim to counter sluggish demand and margin growth. As part of its plan to restructure delivery networks and optimise capacity, FedEx previously announced its intention to reduce costs by $4 billion by the end of fiscal 2025.

Industry experts believe that these job cuts reflect the broader economic uncertainty. Lack of robust economic recovery and sluggish volume growth are forcing companies like FedEx to focus on cost reduction strategies. 

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FedEx's European workforce consists of over 52,000 employees across more than 45 countries and territories. The company operates a vast network and offers a variety of delivery solutions. The job cuts will impact a portion of the European workforce.