Item 2.05. Costs Associated with Exit or Disposal Activities.
On January 19, 2021, Federal Express Corporation ("FedEx Express"), a subsidiary
of FedEx Corporation ("FedEx"), announced a workforce reduction plan in Europe
as it nears the completion of the network integration of TNT Express. A copy of
the press release issued by FedEx Express on January 19, 2021 announcing the
plan is attached as Exhibit 99.1 and incorporated herein by reference. The
execution of the plan is subject to a consultation process that will occur over
an 18-month period in accordance with local country processes and regulations.
The plan will impact between 5,500 and 6,300 employees in Europe across
operational teams and back-office functions.
We expect the pre-tax cost of the severance benefits to be provided under the
plan to range from $300 million to $575 million in cash expenditures. These
charges are expected to be incurred through fiscal 2023 and will be classified
as business realignment expenses. We expect savings from the plan to be between
$275 million and $350 million on an annualized basis beginning in fiscal 2024.
The actual amount and timing of cost savings resulting from the workforce
reduction plan are dependent on local country consultation processes and
regulations and negotiated social plans and may differ from our current
expectations and estimates.
FORWARD-LOOKING STATEMENTS.
Certain statements in this Current Report on Form 8-K, such as statements
relating to FedEx's and FedEx Express's estimates of pre-tax cash expenditures
and savings as a result of the workforce reduction plan and the timeline for
completion, may be considered forward-looking statements within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking
statements include those preceded by, followed by or that include the words
"will," "may," "could," "would," "should," "believe," "expected," "anticipated,"
"plans," "estimates," "targets," "projects," "intends" or similar expressions.
Such forward-looking statements are subject to risks, uncertainties and other
factors which could cause actual results to differ materially from historical
experience or from future results expressed or implied by such forward-looking
statements. Potential risks and uncertainties include, but are not limited to,
the ability of FedEx Express to receive works council approvals, the disruption
of ongoing business, our ability to successfully integrate the FedEx Express and
TNT networks in the expected time frame and at the expected cost and to achieve
the expected benefits from the combined businesses, and other factors which can
be found in FedEx's and FedEx Express's press releases and FedEx's filings with
the U.S. Securities and Exchange Commission. Any forward-looking statement
speaks only as of the date on which it is made. FedEx and FedEx Express do not
undertake or assume any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
99.1 Press release dated January 19, 2021
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the Inline XBRL document).
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