FedEx to Slash Salaries to Cope with Downturn

CEO will take 20% pay cut, senior executives 7.5% to 10% cut and other salaried personnel will get a 5% cut

In a further belt-tightening to cope with the global economic downturn, FedEx said on Dec. 18 it was slashing salaries for many employees.

"Our financial performance is increasingly being challenged by some of the worst economic conditions in the company's 35-year operating history," said Frederick Smith, who is chairman, president and chief executive. Smith will take a 20% cut in base pay while other senior executives will see a reduction of 7.5% to 10% and other salaried personnel will get a 5% cut.

The company also said it was freezing hiring and eliminating merit pay increases for 2009. FedEx, which six months ago announced a restructuring that led to 1,500 job cuts, said that will not be enough.

The company at the same time announced its profit for the fiscal second quarter to November 30 rose 3% to $493 million, in line with most forecasts, but said the outlook is less optimistic.

The new measures aim to reduce expenses by $200 million during the remainder of fiscal 2009 and by $600 million in fiscal 2010.

Copyright Agence France-Presse, 2008

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