FedEx Announces Major Job Cuts and Facility Closures in Southern California
The delivery giant is streamlining operations and investing in automation as part of a major overhaul aimed at achieving significant cost savings.
FedEx is eliminating 173 positions across Southern California and closing facilities in Palm Springs, Victorville, and San Diego as part of a significant operational overhaul. These moves are central to the company's "Network 2.0" initiative, a strategy designed to merge its air and ground delivery networks.
The initiative aims to generate nearly $2 billion in annual savings by the end of fiscal year 2027. FedEx is investing heavily in automated sorting hubs and artificial intelligence for route optimization to enhance efficiency and reduce costs.
The latest job cuts include 62 workers at a shipping hub near Palm Springs International Airport, who will be laid off on September 29. Another 54 workers at a Victorville shipping hub are scheduled for layoffs on September 28. In San Diego, 57 workers are set to lose their jobs at the end of August. These layoffs bring the total number of California workers affected by Network 2.0 to 347.
FedEx has already closed more than 200 stations nationwide as part of this transformation. The company anticipates closing over 475 stations by the end of 2027, according to Scott Ray, FedEx’s chief operating officer for US and Canada surface operations. These stations serve as critical points for local deliveries, where drivers sort packages, load trucks, and manage routes.
"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," FedEx spokesman David Westrick said. "As we go through this transformation, some facilities must close. These decisions are never made lightly. We’re committed to supporting impacted employees through job placement assistance, relocation aid, or severance. As of this time, there are no further Southern California closures planned."
Jobs being eliminated span various roles, including couriers, shuttle drivers, warehouse workers, managers, and administrative and support staff. Previous Network 2.0 reductions include 95 workers in Oakland and 79 in Emeryville last year. Separately, 405 jobs were eliminated at Los Angeles International Airport in November 2023 when FedEx relocated a heavy aircraft maintenance base to Indianapolis.
This strategic shift comes as FedEx faces increased competition, particularly from Amazon, which has developed a substantial delivery operation. Despite these operational changes, FedEx reported strong financial results for fiscal year 2026, with revenue reaching $94.72 billion, a 7.7% increase from the previous year. Net income rose 8.3% to $4.43 billion, and operating margins hit 7.7%, the company's highest in four years. FedEx stock has seen a significant increase, surging more than 38% since the start of the year.