FedEx costs rise due to continued tight labor market

MEMPHIS, Tennessee: Federal Express confirmed on Sept. 21 that its third-quarter spending jumped to $ 450 million as it was forced to raise wages, due to continued labor shortages.

Additionally, FedEx lowered its forecast for 2021, in part because of spending related to the tight job market.

Meanwhile, the company’s shares plunged 4% during trading.

Officials note that competition has intensified in hiring contract workers, with dozens of companies trying to attract workers with increased wages, signing bonuses, and a host of others. incentives. A further deterioration in hiring is expected in the middle of the holiday season, as companies seek staff to deliver gift packages, as well as online orders to buyers. E-commerce heavyweight Amazon plans to hire 125,000 people, while United Parcel Service is planning 100,000 and FedEx is looking to hire 90,000 employees.

FedEx also confirmed that its costs in the first quarter of fiscal 2021 rose 16% to $ 20.6 billion, while the company’s profits fell 11% to $ 1.11 billion. during the second trimester.

At the same time, revenues climbed 14% to $ 22 billion, beating expectations.

FedEx, the world’s largest delivery company, is forecasting annual revenue of $ 19.75 to $ 21 per share, up from a previous estimate of $ 20.50 to $ 21.50 per share.

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