Logistics company FedEx (FDX) is planning to lay off over 480 employees and shut down two facilities as part of its network consolidation initiative to streamline operations. The company disclosed these plans in official notices to workforce development agencies in North Carolina, Nebraska, Iowa, and Texas. Specifically, FedEx will close package distribution centers in Greensboro, North Carolina, and Omaha, Nebraska, which will affect 164 and 102 workers, respectively. In Nebraska, the company stated that operations will be moved to a nearby facility within a 50-mile radius.
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However, additional layoffs are expected in other parts of the country. In Iowa, 84 jobs will be cut from a Des Moines facility, while 131 staff positions will be eliminated at FedEx locations in Garland and Plano, Texas. These changes are set to take effect on September 1. According to FedEx, the moves are tied to “Network 2.0,” which is a multi-year project that is aimed at merging its FedEx Express and FedEx Ground services. This integration is designed to make deliveries more efficient and reduce transportation costs across the board.
It is worth noting that the company has already made significant progress with this plan, as it optimized operations at 100 facilities and recently consolidated 63 stations across 20 markets. Moreover, FedEx executives revealed during a recent earnings update that they aim to close 30% of their parcel terminals within the next two years, according to reporting done by FreightWaves. Interestingly, though, FedEx says that many affected workers will have the opportunity to transfer to other roles within the company. However, doing so may require them to commute farther or even relocate.
Is FDX Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on FDX stock based on 18 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average FDX price target of $268.82 per share implies 12.5% upside potential.
