FedEx buyouts could affect local economy - Action News 5 - Memphis, Tennessee

FedEx buyouts could affect local economy

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MEMPHIS, TN -

(WMC-TV) - FedEx is planning to offer voluntary buyouts to thousands of employees.  The buyouts were announced in August and will primarily be at FedEx Express and FedEx Services.

The question now is: How will the cuts affect the company and the economy?

The slow global economy has definitely had a tremendous impact on the company's budget. That is why a majority of employees are being asked to take buyouts.

Certified financial planner Vincent Perry is responding to FedEx's announcement of voluntary buyouts for employees next year.

"It's just one of those decisions that unfortunately businesses have to make. Never good for the employee, but for the business it can be positive," said Vincent Perry, Ameriprise Financial.

It is part of a restructuring program to boost profitability in FedEx's under performing domestic express business.

The company says it plans to add $1.7 billion to its annual profit by fiscal year 2016 by cutting the number of employees and aircraft and by trimming underused assets.

"In the short term it's going to provide an economic stimulus because we have potentially thousands of employees who now have this influx of cash that maybe they weren't expecting," said Perry. "Long term, I think it could be slightly negative because obviously we have potentially thousands of employees who have left the workforce."

The company has not said how many employees would be affected in the Mid-South.

"When you look at 100,000 plus worldwide employees, 28,000 locally, the brunt of the impact will be felt locally," said Perry.

FedEx says further details about the buyout will be announced no later than the spring of fiscal year 2013.

Copyright 2012 WMC-TV. All rights reserved.


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