FedEx says no plan to lay off employees in the Middle East

The move by FedEx to trim jobs across its global network as part of a major cost cutting programme will have no impact on its staff and operations in the Middle East, according to a senior company executive.

FedEx said last week that it has laid off 1,000 employees worldwide as part of a $1 billion (Dh3.6bn) cost-reduction plan that it announced last month.

Although the company did not specify precisely where the job cuts were concentrated, all its jobs in the region are said to be safe.

"We have not been affected by the job cuts announced last week, all our jobs are still safe," Hamdi Osman, FedEx Senior Vice-President of Middle East, Subcontinent and Africa, told Emirates Business.

He said the current and future cost cutting efforts that include job trimming would hardly be extended to the Middle East due to the region's robust performance.

FedEx currently employs about 290,000 people worldwide and the latest cuts come on top of about 900 layoffs at the company's FedEx Freight unit in February, citing continued decline in consumer spending and unprecedented pressures on the trucking industry.

"Until now, there has not been any necessity to trim jobs in this region. We continue to grow ahead of the other regions and the policies we have adopted for our operations have proved productive and have prepared us for any challenges in the industry," said Osman.

FedEx said in March that its third quarter profits fell 75 per cent to $97 million, or 31 cents per share, and company executives stressed that they would likely cut additional jobs.

At the time they said they planned to reduce expenses by about $1bn during the coming fiscal year, mostly from the Express unit.

In addition to job cuts, the company said it planned to reduce network capacity in its Express and Freight segments, cut back work hours and expand its compensation reductions to non-US workers, where allowed.

Also in December, the package delivery company said it would cut pay for senior executives, eliminate certain bonuses and implement a hiring freeze as deteriorating conditions continue to drag down demand.

FedEx officials had hoped to avoid layoffs and other cuts by trimming salaries.

FedEx CEO Fred Smith said in a statement in December that he would cut his own salary by 20 per cent and other senior executives would take a 7.5 per cent to 10 per cent salary cut.

The freight-transport sector overall has been under siege as the economy has sapped demand for all manner of goods. Virtually every industry linked to freight movement – from rails to trucking to ports – has experienced steep traffic declines.

Osman said recently that the Middle East has been the best performing region for Fedex in recent months because it has not been severely hit by the crisis compared to other parts of the world.

He said the cost cutting efforts would affect regions that have been hit hard by a slowdown in demand.

"Looking at our operations, the Middle East and Africa continue to perform better. The Subcontinent has been hit but it remains promising," said Osman.

He said the company follows a strict hiring policy in its regional operations and that there would be no need for redundancies. "Any move to cut jobs would not affect the region because we do not hire just for the sake of it," said Osman.

"We hire people to handle specific tasks and we are also very careful in the way we spend money."

He, however, said that while the industry has seen a year-on-year average growth of 12 per cent for inbound volumes for the regional express service, this year's growth projections stand at an average of five per cent due to a drop in demand.