This is what’s wrong with capitalism, episode 6,846

1,700 workers are out of luck.

“‘Strong demand for our services resulted in higher volumes and better revenue per shipment at FedEx Express and FedEx Ground,’ said Chairman, President and CEO Frederick Smith. ‘This increased demand comes from improved global economic conditions,’ he added, as well as the improvements the company made during the downturn.

“In its fiscal 2010 first quarter ended August 31, FedEx revenue jumped 18% to $9.46 billion from $8.01 billion the previous year. Also, it reported operFating margin of 6.6%, up from 3.9% the previous year.

“FedEx said the strong earnings were the result of strong FedEx International Priority growth at FedEx Express, continued growth at FedEx Ground and a benefit from the net impact of higher fuel surcharges. But expenses related to employee compensation programs, pension, and medical cost, as well as aircraft maintenance expenses, and an operating loss at FedEx Freight dampened the quarter’s solid results.

“The company also announced that it would combine its FedEx Freight and FedEx National LTL operations effective January 30, 2011 to increase efficiencies and reduce operational costs. While FedEx said this would significantly improve profitability in the segment by 2012, the move will also result in 1,700 job cuts as it shuts 100 facilities.”
FedEx Earnings More than Double, Plans 1,700 Layoffs, by Melly Alazraki, Daily Finance, September 16, 2010

Profits are up or even holding steady and they still cut 1,700 jobs in the middle of a recession. Heartless and stupid.

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One Response to This is what’s wrong with capitalism, episode 6,846

  1. janinsanfran says:

    Exactly what’s wrong with capitalism: people now exist to serve “the economy” (and its overlords) rather than the economy existing the feed and house the people. Sick.

    Oddly, the economist Joseph Stigliz explains this thoroughly and intelligibly.

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