FedEx Corp. (NYSE:FDX) stated on Wednesday that it will lay off around 1,700 to 2,000 employees across its back-office and commercial teams in Europe. This move is part of the logistics company’s attempt to reduce its structural costs. FDX aims to slash $4 billion in costs by the end of 2025, including $1.8 billion by the end of FY24.
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Financial Impact of the FedEx Layoffs
These layoffs will result in FedEx removing certain positions, consolidating back-office and commercial teams, and centralizing certain activities in European shared centers. Furthermore, these job cuts will be spread over 18 months and will result in pretax expenses for legal fees in the range of $250 million to $375 million.
However, the company expects this downsizing will result in annual cost savings between $125 million and $175 million starting from FY27.
Indeed, according to TipRanks’ “Bulls Say, Bears Say,” analysts bearish on FDX stock have highlighted that weak demand and “ongoing headwinds in international markets” could impact its revenues, especially for its air-based logistics business unit, FedEx Express.
Is FedEx a Buy, Sell, or Hold?
Analysts remain cautiously optimistic about FDX stock, with a Moderate Buy consensus rating based on 12 Buys, seven Holds, and one Sell. Over the past year, FDX has increased by more than 10%, and the average FDX price target of $305.44 implies an upside potential of 21% from current levels.
