FedEx Freight layoffs will number 900

FedEx Freight is making “staffing adjustments” to about 900 positions at 150 of its facilities.

Employees were made aware of the cuts in an e-mail to employees by FedEx Freight president and CEO Doug Duncan Thursday.

Duncan cited a continued decline in consumer spending and overall industrial production as putting unprecedented pressures on the trucking industry.

“It’s the worst I have seen in my 30-plus years in this business,” Duncan stated in the release. “The outstanding value proposition and customer service that our team delivers every day is still growing significant market share, but not sufficiently to counter deep declines in our base customer volumes.”

Memphis Business Journal reported Friday FedEx Freight laid off an unknown number of local dock workers on Thursday. Sources had indicated the cuts totaled at least 25 Memphis workers.

Duncan’s e-mail puts the number of affected employees at considerably higher levels, although it did not specify the level of employment, types of jobs affected or locations where the cuts would be made.

“Clearly these staffing adjustments affect individuals in different and personal ways,” the e-mail stated. “We will work diligently to assist employees through these transitions, helping them to understand these changes as well as their options.

“We are taking these steps to navigate through this incredibly challenging environment and remain strong and competitive,” Duncan continued. “Our commitment to serving customers will not change, and these actions will not hinder our ability to provide the industry-leading service our customers have come to expect.”

FedEx said the company will offer an option for affected employees to transfer to other positions or the employees could be recalled if conditions improve in the next three months. FedEx will offer severance packages to affected employees and maintain health benefits for 30 days.

These latest cuts come just months after FedEx first announced a round of cost-cutting efforts in December when the company announced executives and other salaried employees would receive a pay cuts in order to avoid layoffs.

FedEx CEO Fred Smith said in a statement he would cut his own salary by 20 percent and other senior executives would take a 7.5-10 percent salary cut. U.S. salaried employees received a 5 percent cut.

FedEx projected the cuts would help the company save more than $200 million in the remainder of fiscal year 2009 and $600 million more in fiscal 2010.

Though the pay cuts were widely received as groundbreaking efforts in avoiding layoffs, FedEx did add that it was “evaluating other measures should business conditions further deteriorate” in the December announcement.

A FedEx spokesperson said Monday that the December adjustments were based on business levels and forecasts at that time. Since then, there has been "greater than anticipated deterioration" in business.

Although FedEx has seen profits suffer in all of its companies due to the economic crisis, LTL providers have been particularly hurt by declining freight volumes.

In 2008, LTL providers YRC Worldwide Inc., Con-way Freight and Saia Inc. all announced significant national layoffs in an effort to trim expenses.

According to the latest figures from the American Trucking Associations, the For-Hire Truck Tonnage Index fell 11.1 percent in December, marking the largest month-to-month reduction since April 1994, when the unionized less-than-truckload industry was in the midst of a strike.

FedEx Corp. (NYSE: FDX) is Memphis’ largest employer, counting about 30,000 on its payroll locally.