FedEx Corp. has a goal of improving its annual profitability by $1.7 billion over the next three years and much of that improvement will come from cost reductions in the Memphis-based company’s Express and Services divisions.
That is the bottom line of a very general overview offered Tuesday, Oct. 9, by FedEx founder and CEO Fred Smith of specific changes, particularly to the Express division.
Smith made the remarks to a group of 200 investors and analysts in Memphis for a two day conference that continues Wednesday at the Memphis Hilton.
The second day will feature more details from FedEx executives about the cost reductions as well as technological advances linked to cloud computing that Smith says will improve productivity as the company’s head count is reduced in a voluntary buyout program announced earlier this year.
“We’ll be able to take out … thousands of fixed heads that are managing these systems that will move to cloud computing across the enterprise,” Smith said during a question and answer session with analysts.
Smith deferred a number of written questions that were specific to Express to the Wednesday briefings that run most of the work day.
The briefings will include specific categories in both divisions for the cost reductions. Smith characterized the share of the $1.7 billion goal that will come from cost reductions as “the vast majority” of the dollar amount.
Smith also announced the retirement of Dave Rebholz, CEO of FedEx Ground, effective May 31, 2013.