FedEx warned of a potential global recession, as demand for parcels declines worldwide.

The company's stock fell 21% in pre-market trading on Friday after it warned late Thursday that the economic slowdown would reduce its revenue by $500 million below its target, as the weak global economy, especially in Asia and Europe, has harmed FedEx's express delivery business. The company stated that demand for parcels has diminished in recent weeks.

The company also said it is responding by reducing flights and temporarily grounding planes, cutting staff hours, delaying some hiring plans, and closing 90 FedEx office locations in addition to five corporate offices.

Additionally, FedEx (FDX) said its adjusted earnings for the quarter ended August 31 will fall by $260 million, or 17%, compared to the previous year, while revenues increased by $1.2 billion, or 5%, despite missing the company’s previous target.

FedEx Ground service, which is the primary way the company handles deliveries of online purchases made by American consumers, failed to meet its sales target by $300 million.

The company uses independent contractors, not employees, to make deliveries, and many of these contractors complain that rising fuel, labor, and new vehicle costs have made their businesses unprofitable. Some threaten to halt operations on Black Friday, the start of the holiday shopping season, unless FedEx agrees to change their compensation. FedEx insists it will work with contractors facing problems, having filed a lawsuit against the former contractor who was one of the company’s most outspoken critics.

FedEx Ground said in a statement last month: “We recognize that current economic conditions present new challenges, and we remain committed to working with service provider companies individually to address the challenges specific to their situation. Our goal is to enable success for both FedEx Ground and service providers.”

In the same context, about 1,000 of the 6,000 contractors working at FedEx have joined a trade union to pressure the company for better compensation. A survey conducted by the association published this week found that 54% said their businesses with FedEx were losing money, 35% said they were breaking even, and only 11% said they were profitable. The association indicated that the survey reached 1,200 contractors working with the company or who left the company during the past 12 months.