According to the statement, match contributions to FedEx’s 401(k) plan will be suspended for a minimum of one year, starting February 1, 2009.
The company also announced a 20% decrease in CEO Frederick W. Smith’s pay; a 7.5% – 10% reduction in pay for other senior FedEx executives; and a 5% pay cut, as well as elimination of merit-based salary increases, for remaining U.S. salaried exempt personnel in calendar year 2009.
The statement said FedEx has already taken actions to reduce over $1 billion of expenses for all of fiscal 2009, including elimination of variable compensation payouts, a hiring freeze, volume-related reductions in labor hours and line-haul expenses, discretionary spending cuts, and personnel reductions at FedEx Freight and FedEx Office. The new actions are expected to reduce expenses by $200 million during the remainder of fiscal 2009 and approximately $600 million in fiscal 2010.
“Our financial performance is increasingly being challenged by some of the worst economic conditions in the company’s 35-year operating history,” said Smith, in the statement.