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FedEx to incur up to $650 million charge from voluntary buyout

A man walks past a FedEx vehicle at the company's office in Dubai October 30, 2010. REUTERS/Ahmed Jadallah
A man walks past a FedEx vehicle at the company's office in Dubai October 30, 2010. REUTERS/Ahmed Jadallah

(Reuters) - FedEx Corp said it will incur a cash charge of $550 million to $650 million over the next two quarters as several of its U.S. employees accept a voluntary buyout offer.

The world's second-largest package delivery company had offered a voluntary buyout program for its U.S.-based employees as part of its plan to save costs at its underperforming express air freight and services divisions, and improve profit by $1.7 billion over the next four years.

The company had said it expects thousand of U.S. employees to accept the buyout program that expires in May.

Though the company provided an estimate of costs to be incurred from the buyout, the actual costs will depend on employee acceptance rates, FedEx said in a regulatory filing on Tuesday. (http://link.reuters.com/byb26t)

It did not reveal how many employees accepted its offer.

Costs of the voluntary buyout program were not included in the third-quarter and full-year earnings forecast, FedEx said.

FedEx said a limited number of officers and managing directors have also accepted voluntary buyouts.

All eligible and accepting employees will vacate their positions by the end of fiscal year 2014, the company said.

(Reporting by A. Ananthalakshmi in Bangalore; Editing by Don Sebastian)

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