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FedEx Quarterly Profit Drops 75%, Misses Analyst Estimates
FedEx Corp. (FDX) said yesterday (Thursday) that its quarterly profits dropped by 75% – missing analyst estimates – and announced layoffs among other cost-cutting measures. FedEx, and its archrival, Atlanta-based United Parcel Service Inc (UPS), are considered bellwethers of U.S. economic activity because shipping volumes typically increase during healthy economic conditions and deteriorate in recessions.
As the economy hits its roughest patch since the Great Depression, and the unemployment rate soars to its highest level in 25 years, consumers and corporations have reduced purchases and shipping to friends and business counterparts.
The second-largest U.S. package-shipping company said sales fell for the first…
19Mar2009 | Money Morning | 0 comments | ContinuedCompany Layoffs: More Companies Trim the Fat without Trimming the Workforce
The U.S. unemployment rate, currently at a level of 6.5%, could rise to 8% next year. But it could also find a ceiling sooner than expected, as more companies implement unpaid vacations and four-day workweeks to preserve jobs.
The U.S. recession may just now be entering full swing, but storm clouds have been gathering for more than a year and many companies have already trimmed payrolls. Now, the goal for many companies is to prepare for an economic rebound by finding ways to keep the their skilled productive labor intact.
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