FedEx is downsizing California facilities and has eliminated 173 jobs in Palm Springs, San Diego and Victorville as a part of the Network 2.0 program.
As part of FedEx’s new delivery service, Network 2.0, 116 FedEx employees will be laid off by the end of September. The cuts are a part of a broader wave of layoffs hitting Southern California this week, according to California Worker Adjustment and Retraining Notification filings.
Network 2.0 was first announced in 2022, and plans to streamline package pickups and deliveries for consumers. The company is planning to merge its air and ground delivery operations to favor efficiency, including consolidating FedEx stations to “decreasing hand offs” and “optimizing networks.”
The plan is expected to save the company $2 billion in revenue by the end of 2027.
“We remain on track to achieve $1 billion of Network 2.0 and associated One FedEx savings by the end of this calendar year, and the full $2 billion by the end of CY 2027,” President and CEO Raj Subramaniam said in an earnings report call from late June.
In June of this year, the company laid off 57 employees at a San Diego facility. Now, facilities in Palm Springs and Victorville will experience the same cuts.
FedEx Spokesman David Westrick said that all impacted employees planning to be laid off will be offered job placement assistance, relocation aid or severance.
“We’ve been undergoing a network transformation for several years to improve how we pick up, transport, and deliver packages across the US and Canada,” Westrick said. “As we go through this transformation, some facilities must close. These decisions are never made lightly.”
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So far, 347 FedEx employees in California were laid off as a part of Network 2.0. Westrick did affirm, however, that at this time there is no plan to close any more California FedEx facilities.
Both small, local FedEx locations and larger metropolitan operations are set to close as a part of the plan. By the end of 2027, FedEx plans to close 475 additional local pickup and delivery stations.
FedEx also plans to incorporate artificial intelligence into its supply chain decision-making, inventory management and logical error forecasts. FedEx anticipates that the integration of AI will contribute to the streamlining process.