Even though it recently posted a profit for the quarter, FedEx plans to take some fairly drastic steps to cut costs. Frederick W. Smith, chairman, president and chief executive officer of FedEx, thinks 2009 is going to be a very rough year and wants to eliminate $1 billion worth of expenses.
Smith is taking a 20 percent pay cut, and many senior executives will see pay cuts of 7.5 percent to 10 percent. The company will also suspend contributions to employee retirement accounts.
The company has already frozen hiring, reduced labor hours, and announced staff cuts.
CNNMoney reported that the economic climate for FedEx was uncertain, despite the fact that its rival DHL is planning to drop its domestic air and ground services by Jan. 30.