Wall St. turns sour on FedEx after outlook cut
Shares of FedEx fell Wednesday.
The drop comes after the courier cut its full-year outlook.
FedEx is grappling with a labor shortage that's driving up costs and slowing down deliveries ahead of the all-important peak holiday season.
The firm said the staffing problems forced it to shell out $450 million in additional year-over-year costs tied to higher pay, overtime, and payouts to third parties to help it meet shipping obligations.
Chief Operating Officer Raj Subramaniam called the worker shortage "the biggest issue facing our business... overcoming staffing and retention challenges is our utmost priority."
To meet the challenge and ease the strain, FedEx plans to hire 90,000 holiday workers this year. That’s a jump from the 70,000 staff it added for the winter season last year. It hired 55,000 the year before that.
Its main rival UPS is also looking to bulk up staff for the holidays when package shippers can easily see package volumes double.
Shares of UPS traded lower in early Wednesday trading as well.
