10:48 AM EDT, 06/12/2024 (MT Newswires) -- FedEx ( FDX ) announced plans on Wednesday to cut between 1,700 and 2,000 European back-office and commercial jobs as part of an ongoing effort to reduce costs.

The logistics giant said the changes will include removing positions and consolidating teams as FedEx ( FDX ) works to streamline its workforce in Europe. Some activities in the region will be relocated to select shared activity centers in countries that are "best aligned" with the company's needs and existing real estate footprint.

The package deliverer is forecasting between $125 million and $175 million in annualized savings from the move beginning in fiscal 2027, according to a Securities and Exchange Commission filing.

"Alongside the work we've done to optimize our networks, we're taking necessary actions to streamline many of our functions to reduce structural costs," Richard Smith, chief executive of airline at FedEx Express, said in a statement. "We do not take these decisions lightly, but they are essential to putting FedEx ( FDX ) on the right path for the future."

In the first half of 2023, FedEx ( FDX ) cut more than 10% of senior-level jobs and announced a larger restructuring plan called DRIVE that it said would generate $4 billion of permanent cost reductions by fiscal 2025.

The latest layoffs are expected to take place over an 18-month period in accordance with local regulations, according to the FedEx ( FDX ) regulatory filing.

The company expects to take charges related to severance benefits and legal fees of between $250 million and $375 million. The cash expenditures will be incurred through fiscal 2026 and be classified as business optimization expenses.

FedEx ( FDX ) reported a bigger-than-expected decline in fiscal third-quarter revenue in March amid softness in its freight business, and lowered its adjusted earnings per share guidance range for the ongoing year. The company is expected to report fiscal fourth-quarter results on June 25.

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