Minimizing Job Losses and Protecting FedEx for the Long-Term
Today FedEx announced earnings for the second quarter of our fiscal year 2009. As you can see from that announcement, we face serious economic challenges and must take immediate steps to minimize job losses and protect the long-term financial health of our company. We are doing exactly that with several significant actions that impact all of us:
For the first time, U.S.-based management and salaried-exempt team members will take permanent pay reductions. These salary changes will not impact hourly employees such as couriers, mechanics and package handlers.
- My salary will be reduced 20%.
- Other FedEx senior executives will have their salaries reduced 7.5 to 10%.
- The rest of our salaried-exempt workforce will take 5% reductions.
- We are also eliminating 2009 merit increases and fiscal year 09 bonus payments for U.S. salaried-exempt personnel (sales incentives are not affected).
In addition, we will be suspending the 401(k) company match effective February 1, 2009, for a minimum of one year. We hope to reinstate the Company match in 2010, depending upon business and global economic conditions.
These actions are part of broader efforts to reduce costs throughout our organization. Based on these programs we are projected to reduce spending by more than $1 billion through FY2009 and another $600 million through FY2010.
I fully recognize that these pay actions are difficult, but this economic environment is unprecedented for us and requires decisive action. Taking these hard steps now will mean a stronger FedEx later. I’m confident we will manage through these tough times and be positioned to take full advantage of market conditions when the economy rebounds.
I am asking all our team members to keep focused on delivering an outstanding FedEx experience to our customers and to each other. That has made all the difference during past economic challenges in our history. Our ultimate success depends on it again today, and I know we’ll come through.