While we’ve seen layoffs skyrocket in the tech industry over the past few months, we’re now watching them in the shipping industry — in the midst of peak season.
While layoffs in the technology industry have unfortunately become commonplace with the current state of the world economy, the shipping industry has largely avoided them. We’ve seen the numbers, like 11,000 layoffs at Facebook, 13% of employees at Redfin, or hundreds at Salesforce — but now we’re seeing layoffs at Amazon and FedEx. Which begs US shipping expert Craig Fuller’s question, “When was the last time FedEx furloughed workers in the middle of the peak season?”
FedEx Freight confirmed on Saturday that it is waiving holidays in some U.S. markets because “current business conditions are affecting volumes,” impacting the industry. That’s on top of the 47,000 vacationers at the end of May as FedEx looks to tighten its belt to lose at least several quarters.
How we got here
This is consistent with FedEx’s recent trend of cutting costs as demand falls. OVER the last few quarters, FedEx Freight has adopted a strategy of increasing profitability per shipment rather than just trying to move as much volume as possible. As a result, they saw a 21% increase in sales compared to 2021, according to Transport Drive.
Other airlines now appear poised to make similar decisions, with companies like Werner, JB Hunt and Knight-Swift also adjusting their business model amid economic uncertainty amid a slow shipping peak season. “While the peak season so far this year has not been great, it will only accelerate the capacity correction already underway,” Werner CEO, President and Chairman Derek Leathers said in early November.
Amazon is laying off 10,000 employees, and while it accounts for less than 1% of the giant’s global workforce, that’s a staggering number of people losing their jobs at what is supposedly the busiest time of the year. It marks a trend, an ominous one at that, that has sent the trucking industry into a tailspin as restocking is less of a problem for retailers in the current market.