Restaurants brace for drop in demand as FedEx furloughs drivers

MEMPHIS, TENN. — On any given day, the co-owner of Runway Grille estimates half of her customers work for the largest employer in Memphis.

“We have a lot of FedEx employees that come here,” said co-owner Brenda Benson.

On Monday, Benson learned that the company would temporarily furlough some freight drivers during the holiday season.

RELATED: FedEx Freight announces ‘temporary’ furloughs ahead of holidays

“I’m going to really hate it because I feed a lot of workers,” she said. “What I would like to see happen is these drivers hold onto their jobs and they do not furlough anyone.”

Down the road, the phone at Hot Wings Express would not stop ringing Monday with the orders of FedEx employees who work across the street.

“FedEx has kept the doors open for years,” said Jeff Thomas, whose sibling owns the restaurant. “By the grace of God, we’ve been here thirty years.”

FedEx Freight acknowledged over the weekend that the company would furlough workers in early December. The exact number is not known, but reports state that the drivers could be without work for three months.

“FedEx and the Memphis economy are one and the same,” said economist John Gnuschke. “Our success depends upon their success.”

He told FOX13 that he expects that the furloughs will be a temporary setback.

“FedEx is in the business of making money,” Gnuschke said. “They have to make adjustments to their workforce whenever they have changes in demand.”

As the Federal Reserve continues to raise interest rates, he said companies like FedEx will see a drop in demand. However, he suspects that will help curb decades-high inflation.

“I don’t think we’re going to face a recession,” he said. “We’re passed that. Inflation’s going to get better.”

A spokeswoman for FedEx told FOX13 that all the furloughed workers will still have their health benefits.

“In response to current business conditions impacting volumes, FedEx Freight is enacting a temporary furlough in some U.S. markets to align our workforce with operational requirements,” the spokeswoman wrote. “Some eligible employees will be offered permanent transfer opportunities to other markets that have hiring needs… The company will continue to evaluate the environment and bring back furloughed employees as business circumstances allow.