FedEx today joined Motorola, Kodak, and General Motors in suspending its 401(k) match for employees. The employer contributions will stop flowing into employee retirement accounts on February 1 for a minimum of one year.
“We hope to reinstate the company match in 2010, depending upon business and global economic conditions,” writes FedEx CEO Frederick Smith on his company blog.
Other cuts announced today were a 5 percent salary decrease for employees, a 7.5 to 10 percent pay cut for senior FedEx executives, and a 20 percent salary reduction for Smith.
“Our financial performance is increasingly being challenged by some of the worst economic conditions in the company’s 35-year operating history,” says Smith in a statement. “With the decline in shipping trends during our second quarter and the expectation that economic conditions will remain very difficult through calendar 2009, we are taking additional actions necessary to help offset weak demand, protect our business, and minimize the loss of jobs.”
FedEx today reported earnings of $1.58 per diluted share for the second quarter, which ended November 30, up from $1.54 a year ago.