Shares of FedEx closed down more than 21% Friday after the company posted bleak preliminary earnings, citing weakening demand in global shipment volumes.
The shipping giant late Thursday also withdrew its full-year guidance and announced significant cost-cutting measures. The drop in its share price wiped around $11 billion off the company’s market capitalization.
“Global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.,” CEO Raj Subramaniam said in a release Thursday. “While this performance is disappointing, we are aggressively accelerating cost reduction efforts.”
In an interview with CNBC’s Jim Cramer on Mad Money, Subramaniam said he expects the economy to enter a “worldwide recession.”
“We are a reflection of everybody else’s business, especially the high-value economy in the world,” he said.
The announcement came among a broader market slump, which saw the Dow Jones Industrial Average shed around 1500 points this week. Earlier in the week, U.S. equities had their worst day since 2020 after August’s consumer price index report showed headline inflation edged up 0.1% on a monthly basis, despite a drop in gas prices
As part of its cost-cutting moves, FedEx said it will close 90 office locations and five corporate office facilities, defer hiring efforts, reduce flights and cancel projects.