FedEx Corp. said Wednesday it will fold its businesses that move freight and divisions that offer other services into one organization, as the delivery firm steps up efforts to cut costs and increase efficiency across its bloated operations.

The freight bellwether firm, which competes with direct rival United Parcel Service and Amazon.com's growing delivery operation, is racing to reduce overhead costs that have pressured profits as demand for deliveries cools and global recession threatens.

FedEx had come under criticism from investors last year for its subpar performance compared to UPS, which has a unionized workforce.

In response, FedEx outlined extensive plans to cut costs, including parking planes and reducing headcount. The Memphis, Tennessee-based package delivery company aims to cut $4 billion in permanent costs by the end of fiscal 2025 and is scheduled to present more details on their progress at an event on Wednesday.

FedEx executives said last month they were on track to hit $1 billion in permanent cost cuts this fiscal year ending May 31 — putting the company well on its way toward its 2025 goal.

The phased transition announced Wednesday will ultimately bring FedEx Express, FedEx Ground, FedEx Services and other FedEx operating companies into Federal Express Corporation and will be headed by present Chief Executive Officer Raj Subramaniam, the company said.

John Smith will become president and CEO of U.S. and Canada Ground Operations at FedEx Express and assume leadership of surface operations across the FedEx Express, FedEx Ground and FedEx Freight businesses, effective April 16.

FedEx Freight will continue to provide freight transportation services as a stand-alone company under the Federal Express Corp. banner, the company added.

The transition is expected to be completed by June 2024.

Shares of FedEx were up 3.2% before the bell as it also boosted dividend by 10%.