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A FedEx Ground distribution center in Carson, Calif., on Sept. 16, 2022.BING GUAN/Reuters

FedEx FDX-N on Tuesday said it will merge its contractor-based Ground delivery operations in Canada into its company-operated Express unit and convert contractors into employees.

The move, set to be phased in starting in April 2024, comes as the global delivery company is revamping its business to boost profits and better compete with rivals like United Parcel Service UPS-N, AMZN-Q and regional delivery firms.

Company executives will discuss the change with investors and analysts in a conference call on Tuesday, following the release of the firm’s latest quarterly report.

FedEx made a similar change in the U.S. states of Alaska and Hawaii last year.

Still, the company said there will be U.S. markets where packages shift from Express to Ground, its outsourced delivery arm. In those cases, the company said it would continue to use delivery contractors as part of its “hybrid” worker model.

Memphis, Tennessee-based FedEx in April said it planned to combine the two delivery units as part of its wider effort to slash $4 billion in costs by the end of its 2025 financial year. That announcement came about two weeks after activist investor D.E. Shaw won two additional board seats.

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