FedEx Cuts Some of Its Profit-Sharing

FedEx Corp. is eliminating profit-sharing for 68% of its work force for 18 months to cut costs because companies are shipping fewer expensive overnight packages.

About 150,000 employees of the largest one-day delivery company won’t receive profit-sharing for the second half of the fiscal year ending May 31 and all of fiscal 2002 “unless business improves significantly,” a spokeswoman said. Most of the affected employees work at FedEx Express, the unit that handles overnight shipments.

The company said it will defer some aircraft deliveries scheduled for fiscal 2002, scale back flights, sell planes and accelerate the planned retirement of “a significant number” of Boeing 727s. FedEx said May 7 that it will earn less than expected this quarter and next because of fewer overnight shipments.

FedEx fell 9 cents to $40.52 on the NYSE.