FedEx Corp (FDX.N) on Wednesday said it would cut its officer and director ranks by more than 10% as part of a broad cost-reduction effort that has reduced staffing at the delivery giant by 12,000 workers since June, a spokeswoman said.

Shares in FedEx rose 3.4% to $200.52 as investors applauded the move, which signals progress on the company's plan to slash expenses by $3.7 billion this year.

FedEx informed employees about the senior-level layoffs in a memo, which did not say how many positions would be affected. The company's overall workforce reductions account for a little over 2% of FedEx's 547,000 full-time and part-time workers reported for the year ended May 2022.

"Unfortunately, this was a necessary action to become a more efficient, agile organization," wrote Chief Executive Raj Subramaniam, who added that FedEx is consolidating some teams and functions.

Most of the cuts came through attrition and other headcount management efforts, spokeswoman Rachael Simmons said.

In mid-September, FedEx pulled its profit forecast and shares swooned more than 20% - the largest single-day drop in the company's 50-year history.

Subramaniam, the company's newly minted CEO, blamed a global business downturn while critics pointed to a flat-footed response to slowing demand and ongoing profit pressure from FedEx's expensive, separately run business units.

Gary Bradshaw, a portfolio manager with Hodges Capital Management in Dallas, recently told Reuters that job cuts would be welcome, particularly after FedEx lowered its annual profit forecast.

"They've got lots of right-sizing to do," Bradshaw said.

For decades, FedEx was favored by investors over its unionized competitor United Parcel Service (UPS.N) because it relied on less costly nonunion and outsourced labor. But in recent years UPS CEO Carol Tomé has delivered bigger profits and better service from that company's single network.

With its move on jobs, FedEx will have reduced the number of its full- and part-time employees to around 535,000 - roughly on par with UPS, based on workforce counts in the most recent annual reports for each company.

But those numbers only tell part of the story because they exclude roughly 6,000 FedEx contractors and their workers, who handle most of the FedEx Ground's home delivery business.

Most Ground contractors employ about nine to 12 employees each, said consultant Satish Jindel, who helped found the company that was rebranded as FedEx Ground. Using an average of 10.5 workers per contractor would add a total of 69,000 jobs at Ground.

FedEx already has temporarily furloughed workers at its trucking division FedEx Freight as the pandemic-fueled e-commerce delivery bubble deflates and a recession threatens, joining transportation-focused companies ranging from delivery upstart Amazon.com (AMZN.O) and trucking company C.H. Robinson Worldwide (CHRW.O) to transportation broker Uber Freight and freight forwarding startup Flexport in announcing layoffs.