FedEx Freight will begin laying off drivers next month

FedEx Freight, the less truckload arm of FedEx Corp. and the country’s largest LTL haulier, announced Saturday that it will lay off an undisclosed number of drivers starting in early December.

The layoffs will last approximately 90 days, during which affected workers will continue to receive health care benefits and claim unemployment benefits in their respective states of residence. Some eligible employees will be offered the opportunity for permanent transfer to other markets with hiring needs, the unit said in a statement.

The layoffs are expected to affect a small number of drivers and not all facilities will be affected, said Miranda Yarbro, a spokeswoman for FedEx Freight. The layoffs are voluntary, Yarbro added.

“Based on our past experience with vacations and the incentives we offer, we hope employees will volunteer to fill a business need,” Yarbro said in an email.

The unit employs around 45,000 people. It was not clear how many drivers it employs.

The measure was taken in response to the slowing macroeconomic conditions that have hurt LTL demand in recent weeks, the entity said. The LTL segment, which has shown very strong growth post-pandemic, has recently seen volumes stabilizing due to economic uncertainty caused by high inflation and recession concerns.

FedEx Freight was the best performer of FedEx’s (NYSE:FDX) three transportation business units. The two largest units, FedEx Express and FedEx Ground, were hit by high costs and slower-than-expected demand. FedEx Freight, on the other hand, was focused on profitable growth and was willing to dump unprofitable tonnage to achieve that goal.

In the first quarter of fiscal 2023, which ended Aug. 31, FedEx Freight’s operating income grew 67%. The gains were driven by measures to improve shipping performance as well as the positive impact of higher fuel surcharges, the parent company said.

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