FedEx preps employees for buyout rollout
Feb. 07--FedEx employees began to get a picture Wednesday of who's going and who's staying as the company moves toward a round of voluntary buyouts starting this spring.
The Memphis-based company's FedEx Express and FedEx Services units began internally communicating details of a new organizational chart that will be put in place over the next several months.
A FedEx spokesman said the voluntary departures would include more than 10 percent of jobs at the officer and director levels.
Workgroups also are being alerted if they won't be eligible for buyouts, or are "carved out" of the program due to the company's operational needs.
Among the planned departures are FedEx Express vice presidents Bob Bennett, Brian Faughnan, Amy Langston, Bob Palmer and Dennis Roche and 18 managing directors.
At FedEx Services, senior vice president of corporate marketing Laurie Tucker is taking a buyout. Senior vice president of global marketing and customer experience Raj Subramaniam will fill newly created post of executive vice president. Scott Harkins, a vice president of marketing, will become senior vice president global portfolio marketing. A new senior vice president integrated marketing and communications will be filled later.
The realignment is part of a push to increase FedEx profits by $1.7 billion a year by the end of fiscal year 2016.
Spokesman Glen Brandow said the company aims to streamline major processes to reduce cost and gain efficiencies and combine similar functions to allow effective operation with fewer people. It's prioritizing vital activities and deferring less critical tasks, while seeking to maintain outstanding customer service.
This week's notifications come in advance of a Feb. 15 target date for telling employees who will be eligible to take a buyout. Employees would have until April 1 to decide, and departure would come in three waves between May 31 and May 31, 2014.
Buyout packages would max out at two years of base pay and include $25,000 in assistance on health care expenses.
FedEx hasn't disclosed a target for personnel reduction, but the program appears likely to exceed 2004 buyouts that eliminated 3,600 jobs.
Analysts who follow FedEx have speculated voluntary buyouts could involve 3,000 to 5,000 positions.
It's unclear how many upper-echelon employees at the director level and above have already had discussions with the company about leaving.
FedEx officials have emphasized that the voluntary buyout would be aimed at certain nonoperational staff members.
Helane Becker, analyst with Dahlman Rose & Co., said she hadn't heard details of the realignment's impact on personnel "but I know that the positions that won't be as affected will be the ones that are customer facing and customer dependent."
Job cuts, along with fleet upgrades and technology-driven efficiency improvements are part of the push toward consistently better profits.
The company notified about 115,000 U.S. employees in August that the buyout program was coming.
Employees in FedEx Express, FedEx Services, the corporate office and FedEx TechConnect were notified in December of the buyout program's components and timeline.
Express and Services employ about 28,000 in Tennessee, most of them in the Memphis area.
Departing employees would receive four weeks of gross base salary as of Nov. 30, for every year of continuous service. Maximum buyout would be two years of base pay. To be eligible, employees must have at least five years' continuous service with the company as of Nov. 30.
The package also would contain a provision to reimburse health care expenses through a one-time, $25,000 credit that can be used over five years for qualified expenses including insurance premiums.
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