MEMPHIS, Tennessee: Federal Express confirmed on September 21 that its third-quarter expenses had jumped to $450 million as it was forced to increase salaries, due to the ongoing shortage of labor.
Further, FedEx lowered its forecast for 2021, partially as a result of expenses linked to the tight employment market.
Meanwhile, the company's stock plunged four percent during trading.
Officials note that competition has stiffened in hiring contract employees, with scores of firms attempting to attract workers with increased salaries, signing bonuses, as well as a host of other incentives. A further worsening in hiring is projected amid the holiday period, as firms look for staff to deliver gift packages, as well as web-based orders to buyers. Ecommerce heavyweight Amazon plans on hiring 125,000 people, while United Parcel Service is eyeing 100,000, and FedEx is looking to bring on 90,000 employees.
FedEx has also confirmed that its costs during Q1 of the fiscal year 2021 swelled by 16 percent to reach $20.6 billion, while the company's profits slid 11 percent to $1.11 billion during Q2.
At the same time, revenues climbed 14 percent to reach $22 billion, surpassing projections.
FedEx, the leading delivery firm worldwide, projects full-year revenues at $19.75-21 per share, compared to the earlier estimate of $20.50-21.50 per share.