Props to FedEx: facing a loss in profits, they cut executive pay instead of laying off workers

[Bucky]

http://www.guardian.co.uk/business/feedarticle/8165723

FedEx cuts pay, suspends retirement plan payments
By Nick Carey

* Cost cutting measures to save $800 mln by end of FY2010
* Salaried workers' pay cut by 5 percent; execs' cut more
* FedEx suspends 401(k) contributions
* Company foresees further economic hardship ahead
* Q2 EPS of $1.58 meets expectations (Recasts with employee pay cuts, adds statement from Teamsters union)

DETROIT, Dec 18 (Reuters) - Package delivery giant FedEx Corp said it was cutting pay for all salaried personnel by 5 percent and suspending retirement plan contributions as it slashes costs because of a bleak U.S. economic outlook.

The company, which said its cost-cutting measures would reduce expenses by $800 million by the end of its fiscal-2010 year, said CEO Fred Smith would take a 20 percent pay cut and other senior executives would take pay cuts of 7.5 to 10 percent as of Jan. 1.

It also suspended paying matching contributions to its 401(k) retirement plan for a minimum of one year as of Feb. 1.

FedEx said it has a hiring freeze in place and has cut staff levels at its FedEx Freight and FedEx Office units.

"Our financial performance is increasingly being challenged by some of the worst economic conditions in the company's 35-year operating history," Smith said in a statement.

[ogneopasno]

1. That's FedEx, not UPS.

They also hire a lot of temps, so they can take a bit of a hit without it "showing up" as layoffs.

[Dennis Donovan]

2. Uups!

:D

[supernova]

3. Smart FedEx

I fervently hope more companies will think about doing things this way, instead of immediately jettisoning as many workers as they can.

edit: FedEx, D'oH

[grannie4peace]

4. i was gonna say-- they are the usps competitors !!!!

but so is fed-ex :shrug: :shrug: :shrug:

[ellenfl]

5. i bet the 401k matching never comes back. eom

[Ikonoklast]

6. FedEx has used 1099 and 'contract' employees for years to keep the Teamsters out

They are notoriously anti-labor and are losing lawsuits right and left over the years for employee compensation and discrimination in the workplace.

http://www.msnbc.msn.com/id/13132754/
http://www.fedexdriverslawsuit.com/
http://www.lieffcabraser.com/fe-race-discrim.htm

I have no use for FedEx.

These are just some of the suits they have had filed against them and lost.

There is still a huge lawsuit pending in Indianapolis currently involving 12,500 employees misclassified as 'contract' employees; it is just a way for FedEx to avoid paying taxes and benefits on those people.

FedEx's exposure to financial liability in that case may be in the BILLIONS.

[high density]

7. 5% paycut + loss of 401k match

I don't know what the 401k match is but that could be effectively a 10% cut on the earnings of their salaried employees. If my employer asked me to do that, I'd be out of there pronto. Maybe that's their way of getting rid of people without layoffs.