FedEx and UPS are among logistics companies laying off employees as they go forward with massive overhauls to their distribution networks.
According to a Worker Adjustment and Retraining Notification (WARN) Act notice filed in Tennessee, FedEx is parting ways with 217 employees in a facility in Nashville-area Lebanon. The permanent layoffs are expected to take place between May 9 and May 30.
The package delivery giant’s FedEx Supply Chain division is also shuttering a facility in Jacksonville, Fl., and will temporarily lay off 87 employees working at the site. A WARN notice filed with the state said FedEx is discontinuing services at the warehouse due to a customer’s decision to transition its business to a new provider.
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The transition is expected to be completed by May 31.
FedEx said in the notice that it anticipates those employees will be offered positions with the incoming provider, which is unnamed. Additionally, the company said it is also working to identify other opportunities within the company for those affected, including potential roles at nearby facilities.
Impacted workers will continue receiving wages and benefits through the end of May.
The employees at the Lebanon and Jacksonville sites are not unionized and do not have bumping rights. These rights grant union employees the first right to apply for other available positions within the company.
Layoffs will also be impacting 244 more employees at a UPS warehouse in Portland, Ore. as at it preps to temporarily close the location beginning this summer. According to the WARN notice of the job cuts, 672 workers will stay on board.
The Teamsters-represented workers will be separated from employment beginning May 30, unless otherwise required by their applicable collective bargaining agreement. The facility will be closed on June 30.
Like the FedEx cuts, UPS will attempt to mitigate this impact by offering work to affected employees in other positions where possible.
Since the UPS employment changes will affect union employees, there are bumping rights in effect.
Both the FedEx and UPS layoffs come as the companies have been consolidating and reshuffling their operations to save billions of dollars.
FedEx’s Drive transformation framework is designed to save the logistics provider $6 billion by 2027 and includes the Network 2.0 strategy, which is designed to consolidate the FedEx delivery network with fewer stations and routes and increase shipping efficiency.
Similarly, UPS’ Network of the Future plan aims to cut $3 billion in costs by 2028. The strategy is aimed at flowing more packages into automated warehouses and is expected to triple the number of U.S. buildings using automated technologies to 400 in that timespan.
Last March, the company was transparent that jobs would likely be impacted with the automation overhaul, with UPS’ U.S. president Nando Cesarone saying the Network of the Future initiative would “significantly reduce our dependency on labor.”
Across warehousing and storage, employment has been relatively stagnant after the boom period of the Covid-19 pandemic. According to the Bureau of Labor Statistics (BLS) jobs report data released Friday morning, preliminary March employment totaled 1,822,400 workers across the sector.
On a seasonally adjusted basis, the total is down 1.2 percent from the 1,844,500 employed across warehousing and storage. On a two-year basis, employment numbers are down 0.2 percent.
In March, businesses like Ryder Logistics, Penske Logistics and Quiet Logistics tacked on the layoff tally for the industry.
At Ryder, a warehouse in Hutchins, Tex., will be laying off 110 employees by May 10, more than two months after cutting 87 employees at a facility in Curtis Bay, Md.
Both the Penske and Quiet layoffs are occurring at buildings in Illinois, according to WARN notices filed with the state in May. Penske officially axed 96 employees at an Aurora facility on March 31, while Quiet is cutting 76 employees on May 23 as part of a plant closure in Chicago.
The Chicago warehouse opened in 2020 and is one of nine in Quiet’s U.S. network. Quiet was acquired by American Eagle Outfitters in 2021 as the apparel retailer sought to bring more of its supply chain capabilities in-house and serve as a third-party logistics provider (3PL) for other brands.
Despite the initial hype regarding the acquisition, AEO has coincidentally been “quiet” in the years after about the success of the platform integration. Last March, the apparel retailer took a $94 million impairment on the Quiet Logistics business as it adjusted to reduced e-commerce fulfillment demand.
Logistics giants elsewhere in the supply chain are cutting employees as well. DHL Supply Chain is laying off 52 employees in a Taunton, Mass. warehouse. That layoff date is expected to take place before August 8.
In Perris, Calif., Maersk’s U.S. warehousing and distribution services division will lay off 75 workers by April 30.
