FedEx Freight to furlough employees as LTL demand drops

FedEx Freight announced that it will furlough an unspecified number of employees to make up for slowing demand.

The shipping giant's less-than-truckload (LTL) division will continue to offer health benefits and "other financial incentives" to the furloughed employees, a representative said in an emailed statement. Some eligibly employees will be offered permanent transfers to other higher volume markets.

"The company will continue to evaluate the environment and bring back furloughed employees as business circumstances allow," the statement said.

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FedEx Freight employs over 46,000 people, according to the company's website. Last quarter, it was FedEx's most profitable segment, reporting a 67% increase in operating income from the previous year. However, the company said declining volumes still affected its LTL business.

The move is among several cost-cutting measures made by FedEx in the last two months. Following disappointing first-quarter results, the company announced a plan to reduce operating costs, including decreasing daily flights at FedEx Express and consolidating FedEx Ground sort operations.

Amid the holiday peak season, volumes are expected to take a dive from last year's with declining consumer demand. Though FedEx traditionally announces how many employees they expect to take on for the season, it skipped the release this year.

Niki Scheinberg is the FedEx and logistics reporter at The Commercial Appeal. She can be reached at monika.scheinberg@commercialappeal.com.

This article originally appeared on Memphis Commercial Appeal: FedEx Freight furloughs employees to make up for low volumes