© Reuters. A plane of FedEx Express carrying a first batch of Pfizer/BioNTEch COVID-19 vaccine is seen at LAX Airport, in Los Angeles
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(Reuters) – FedEx Corp (NYSE:)’s express unit on Tuesday announced a plan to lay off between 5,500 and 6,300 employees in Europe, as it nears the completion of the network integration of its TNT Express unit.
Shares of the package delivery firm were up about 1% at $254.76 in morning trade.
FedEx acquired European operator TNT Express, which specializes in shipments between businesses, in 2016 as part of its plan to expand in Europe.
The duplication from two European networks connecting similar geographies will result in job cuts across operational teams and back-office functions, the company said.
Weak shipment sales in Europe over the past few years have led to sluggish growth in the TNT unit and weighed on FedEx’s results.
The plan is expected to result in savings of between $275 million and $350 million on an annual basis beginning in fiscal 2024, FedEx said, adding that it expects to incur severance charges of between $300 million and $575 million through fiscal 2023.
FedEx Express uses a global air-and-ground network to speed delivery of time-sensitive shipments.
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