(Bloomberg) -- FedEx Corp. said it cut 29,000 US jobs over the past year and issued a 2024 profit outlook that missed Wall Street’s expectations as it continues to trim costs in the face of waning package delivery demand.

The company is slashing expenses as the industry copes with a decline in package volume following two years of surging demand fueled by online shopping. Adjusted earnings in the next fiscal year are projected be in the range of $16.50 to $18.50 a share, the midpoint falling short of the $18.31 average of analysts’ estimates compiled by Bloomberg.

The outlook “shows some cracks,” Ravi Shanker, an analyst with Morgan Stanley, said in a research note. “It may not necessarily get easier from here. Macro is likely to remain choppy in the near term.”

FedEx’s shares pared a drop of 3.6% to fall 0.6% at 9:36 a.m. Wednesday in New York. Rival couriers also slipped, with United Parcel Service Inc. down 1.4% and European companies Deutsche Post AG and PostNL NV also declining.

The FedEx Express unit has been hit particularly hard by the dropoff in demand. During the pandemic, the business was swamped with packages as port congestion forced some shippers to send their wares by air freight. Maritime shipping has returned to normal and commercial airlines are ramping up cargo operations, forcing FedEx to reduce flights and park older planes.

Cost Cuts

FedEx is looking to avoid the missteps that forced the company to withdraw last year’s earnings forecast. Chief Executive Officer Raj Subramaniam, who implemented a $4 billion cost-savings plan after assuming the top post in mid-2022, told analysts on a conference call Tuesday that the 29,000 job cuts last fiscal year exceeded its plan. The Memphis-based company aims to save another $2 billion by integrating its two distinct delivery networks.

Profitability will be a key focus in the coming year as FedEx navigates “a challenging demand environment,” Chief Financial Officer Michael Lenz said in a statement detailing the outlook and fiscal fourth-quarter results. Lenz plans to retire effective July 31, the company said in a separate announcement Tuesday.

FedEx has trailed UPS on profit margins even though its larger rival has a unionized workforce and pays its drivers more than twice what their counterparts at FedEx’s ground network make.

Read More: UPS CEO Says Strike Fears Cost Company 235,000 Deliveries a Day

With UPS’s union workers in contract talks and at risk of going on strike as soon as Aug. 1, FedEx has a chance to win some business from its chief competitor. FedEx Ground has already seen some shippers shift volume away from UPS on concern about a potential strike.

Brie Carere, FedEx’s chief customer officer, said on the call that while there was no material benefit during the quarter, the prospect of a UPS strike “has opened a lot of doors.”

“We’re having a lot of great conversations with legacy UPS customers,” she said on the earnings call. “We feel really good about the sales pipeline.”

(Updates with share trading in fourth paragraph)

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