FedEx is in serious damage control mode

FedEx is convinced its business won’t deliver—at least not in the shape it’s in right now.

The logistics behemoth’s earnings for the quarter ended Aug. 31 fell well below expectations. 

Just like analysts predicted and its independent contractors feared, FedEx chalked up the poor performance to a “global volume softness,”

To make up for the shortfall, the Tennessee-headquartered company is freezing hiring, ..

closing 90 office locations, parking some cargo aircraft, reducing Sunday ground operations and closing five corporate offices, CEO Raj Subramaniam has said.

On the back of the poor earnings results, FedEx’s stock tumbled 16% after hours on Thursday (Sept. 15).

Charting the drop

FedEx's share tumbled after hours on Sept. 15, 2022 after reporting poor earnings

Weak links

FedEx’s largest unit, Express, faced a revenue shortfall of about $500 million compared with the company’s forecast

A smooth road ahead

Despite the current headwinds and stiff competition from United Parcel Service (UPS) and Amazon, FedEx’s business will persevere.

Fun fact: Family edition

Started by Frederick Smith in 1971, FedEx pioneered using aircrafts to deliver packages, using the hub and spoke mode.

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