Updated from 5:09 p.m. EDT

FedEx's ( FDX) largest operating unit, FedEx Express, will offer voluntary early retirement and severance programs in fiscal 2004, which will result in a charge of roughly a quarter of a billion dollars, but should ultimately lead to savings of millions of dollars every year, the company said.

The move could reduce the company payroll by as many as 14,000 people, Reuters reported.

The first program will offer a voluntary early retirement option with an enhanced pension package to certain groups of employees age 50 or older. The second will offer voluntary severance incentives to eligible employees.

Depending on employee acceptance rates, the pretax charge will probably be $230 million to $290 million in fiscal 2004. Most of the charge will be recorded in the first half of the fiscal year, and about one-third of the pretax charge will be cash. The remainder of the charge relates primarily to pension and postretirement health care liabilities.

FedEx estimated the savings from the programs at $100 million to $130 million in fiscal 2004, primarily in the second half of the fiscal year, making the net cost around $130 million to $160 million. The company expects to save $150 million to $190 million a year starting in fiscal 2005.

The company expects earnings of 52 cents to 60 cents a share in the first quarter, compared with 52 cents a share the previous year. Earnings for fiscal 2004 should be $3 to $3.15 a share, FedEx said. Both outlooks exclude the net impact from the early retirement and severance programs, which is expected to be 25 cents to 30 cents a share for fiscal 2004.

FedEx ended New York Stock Exchange trading at $64.61, up 63 cents.

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