MEMPHIS, Dec. 18 (UPI) -- U.S. shipping giant FedEx said it would cut pay for 36,000 salaried workers by 5 percent next year in an effort to save $800 million through June 2010.
The pay cuts are to start Jan. 1 and include President, Chairman and Chief Executive Officer Fred Smith accepting a pay cut of 20 percent, the Memphis Commercial-Appeal reported Thursday.
The cuts include a suspension of merit raises and company contributions to 401K retirement plans, the newspaper said.
"Our financial performance is increasingly being challenged by some of the worse economic conditions in the company's 35-year operating history," Smith said.
FedEx said it earned $1.58 per share in its second fiscal quarter, a slight improvement over a year ago. But, it lowered its earnings forecast considerably for the remainder of the year ending May 31, the newspaper said.
"Significant uncertainty exists in the global economy. Our latest earnings outlook reflects that uncertainty," Chief Financial Officer Alan Graf Jr. said.
