FedEx Freight, the company’s less-than-truckload arm unit, says an unspecified number of its employees will be furloughed in early December to match lower-than-expected demand.
The furloughs will last around three months. During this time, workers will still receive health benefits and may file for unemployment benefits with the state.
FedEx Freight spokesperson Miranda Yarbro told FreightWaves said the furloughs – which are voluntary – will affect only a few drivers. Neither will all facilities be targeted.
The unit employs around 45,000 people, but it remains unclear how many of them are drivers. The furlough comes as the LTL segment has seen volumes taper off in recent weeks amid high inflation and fears of a recession on the horizon.
FedEx Freight has performed the best among the company’s other two, larger business units: FedEx Express and FedEx Ground, which have also been hurt by higher costs and slower-than-expected demand.
In its most recent quarter, the unit reported 21% growth in revenue and a 67% rise in operating compared to a year prior. Still, average daily shipments over that same time frame fell by 5%.
FOX Business has reached out to FedEx Freight for additional details.