According to FedEx, the furloughs for FedEx Freight, which employs approximately 47,000 people, are scheduled to last for around 90 days, during which time the affected workers will continue to receive health benefits but will not be paid.
The company noted that the workers will be allowed to file for unemployment benefits in their respective states of residence. Some employees will also be eligible to accept offers of permanent transfers to other markets that have hiring needs. (Related: Recession or DEPRESSION? Check out how many American companies are laying off employees this year.)
"The company will continue to evaluate the environment and bring back furloughed employees as business circumstances allow," said FedEx in a statement.
FedEx Freight spokesperson Miranda Yarbro noted that the furloughs are only expected to affect a small number of drivers and not all facilities will be targeted, just those in areas experiencing steep declines in demand for less-than-truckload delivery.
"Because of our previous experience with furlough and with the incentives we are offering, we are expecting employees to volunteer to meet the business need," said Yarbro.
The furloughs are just the latest in a series of actions done by FedEx to cut the conglomerate's operating costs in response to the falling demand for delivery services and the general downturn in the American economy.
FedEx Freight initially saw tremendous growth following the downturn caused by the economic restrictions in 2020, but since then a lot of the expansions the company made in response to the heightened demand have been left off due to recent economic uncertainties caused by high inflation and fears of a recession.
The move to furlough drivers comes after FedEx announced that it was cutting cargo flights and parking more of its planes as the company sees a massive decline in the air freight market.
The furloughs, the reduction in air freight deliveries and all other actions are part of up to $2.7 billion in cost cuts FedEx initially outlined in September after falling demand hammered the company's profits at the beginning of the year. The value of the company's stocks has declined by 32 percent since the start of the year. Average daily shipments with FedEx Freight also fell by five percent during the most recent quarter.
Interestingly, FedEx Freight is the best performer among FedEx's three main transport business units that also include FedEx Express and FedEx Ground. The fact that it is also being hurt by high costs and lower demand despite seeing profitable growth is a terrible sign pointing toward an economic depression.
Unfortunately for America's economy, many companies in their third-quarter earnings cited a slowdown of demand and are announcing layoffs in response.
C.H. Robinson Worldwide, a major freight broker, said it will cut costs by $175 million, which will include layoffs, to cope with a projected steep downturn in economic activity in 2023. Other carriers like Werner, J.B. Hunt and Knight-Swift are also adjusting their operating costs in the face of economic uncertainty even during the coming holidays.
"While peak season this year is underwhelming thus far, it will only hasten the capacity correction that is already underway," said Werner CEO, President and Chairman Derek Leathers in an earnings call.
Many companies also cited the Federal Reserve's continued desire to boost interest rates as a misguided solution to cooling inflation rates as the reason for the slowdown in demand.
Watch this clip from InfoWars with Alex Jones talking about how FedEx has confirmed that the economy is imploding.