NEW YORK (AP) -- Investors are driving up shares of FedEx Corp. after the world’s second-largest package delivery company lifted the veil on a much anticipated cost reduction and restructuring plan.
FedEx plans to add $1.7 billion to its annual profit by fiscal 2016 by cutting the number of employees and aircraft and trimming underused assets.
Founder and CEO Fred Smith said most of the cost cuts will come in the company’s Express and Services units, which have been hurt the most by the slow global economy. A majority of the employees that are being asked to take buyouts are in the U.S.
Shares rose 3.2 percent, or $2.72, to $88.30 before the opening bell.
Larger rival UPS Inc. has also said it is cutting costs to adjust to global economic conditions.