MEMPHIS, Tennessee: In its most recent quarter, FedEx took a $470 million loss due to serious labor shortages.
According to CFO Michael Lenz, the lack of available workers affected the company, more than any other factor.
According to CNN Business, the company said its adjusted income was essentially unchanged, despite its revenue being up nearly $3 billion to $23.5 billion in the quarter ending 30th November, and the labor shortage was the largest single reason for this.
Lenz said the $470 million loss was divided almost evenly between higher pay to employees and higher rates paid to contracted trucking firms.
In response, FedEx is hiring new employees and launching engagement and retention initiatives, and CNN Business reports FedEx has seen a good response from its current hiring efforts.
In the last week alone, the company said it received 111,000 job applications, the highest in its history and up from just 52,000 in a week in May 2021.
FedEx is not the only firm affected by labor shortages. According to the most recent Job Openings and Labor Turnover Survey from the U.S. Department of Labor, which analyzed data from October, there are more than 11 million job openings in the U.S., 3.6 million more than the number of people actively searching for work.
In its most recent "Workplace Trends" report, Glassdoor, a website through which employees can anonymously review companies, said the labor shortages will continue into 2022.
"Labor shortages defined the 2021 job market. As customer demand roared back to life, employers faced acute hiring challenges, as workers trickled back into the labor force," the report added.
"Unlike past recessions, the U.S. has largely skipped the phase of the recovery where employers have a large pool of unemployed workers to hire from. Employer reliance on furloughs kept the pool of available workers relatively small throughout the pandemic," it added.