FedEx launches biggest restructuring in its 50-year history trends now
FedEx is undertaking a vast restructuring to consolidate its separate delivery companies into a single entity, in a move to cut costs that could spell the end of the staff delivery driver.
The delivery company said last week that FedEx Express, FedEx Ground, FedEx Services and other units will be rolled together in a companywide reorganization intended to slash $6 billion in costs by fiscal 2027.
The FedEx Express division currently only hires staff drivers, but the Ground unit uses non-employee contractors to move parcels, and some analysts believe staff drivers could be phased out entirely in the combination.
'Will they go all the way to independent contractor service-providers? Yes, I see that happening,' Satish Jindel, founder of logistics consultancy ShipMatrix, told Bloomberg News.
FedEx has been vague about its plans, telling investors only that it plans to use a 'hybrid' of the employee and contractor models, and the company did not immediately respond to a request for comment from DailyMail.com.
FedEx Express, FedEx Ground, FedEx Services and other units will be rolled together in a companywide reorganization intended to slash $6 billion in costs by fiscal 2027
The FedEx Express division (above) currently only hires only staff drivers, but the Ground unit uses non-employee contractors to move parcels
FedEx CEO Raj Subramaniam announced the plan to streamline operations last Wednesday, almost a year after activist investor D.E. Shaw pushed for change and won two additional board seats.
'We believe now is the right time to reorganize how we work together,' Subramaniam told a company meeting in New York City.
'We will be leaner, more agile and better positioned to execute on our mission to help customers compete and win with the world's smartest logistics network.'
The combined business is expected to handle all deliveries from June 2024 as part of the wider plan by the Memphis-based group to cut $4 billion in permanent costs
