According to sources familiar with the situation, truck brokerage giant CH Robinson Worldwide Inc. is laying off between 1,000 and 1,200 employees, most of whom work at the vice president and chief executive officer level.
The move comes a week after the Eden Prairie, Minnesota-based company (NASDAQ: CHRW) reported weaker-than-expected third-quarter results and highlighted upcoming labor cost cuts to combat the impact of slowing demand and rising costs .
“We have outperformed ourselves in terms of headcount,” said Bob Biesterfeld, Robinson’s president and CEO, on a post-earning call. Robinson employs nearly 17,000 people.
Biesterfeld said he does not predict that truckload demand will fall as quickly as it has, nor that spot market and contract rates will fall significantly.
In a statement on Wednesday evening, the company did not confirm the number of layoffs and disputed the figure given by sources, adding:
“As we said in our Q3 results last week, changes in market conditions coupled with many successful efforts on our digital roadmap aimed at more efficiently scaling our model mean we are able to reduce our overall cost structure.
“As a result, we are eliminating some positions at CH Robinson. These are not easy decisions as we recognize the significant contribution of the employees involved. We have tried to approach this with the utmost respect and empathy for our former colleagues and are providing transitional assistance.”
In late February, Robinson entered into a collaboration agreement with Ancora Holdings Group LLC, an activist investor group. It also appointed Henry Maier, a former CEO of FedEx Ground, FedEx Corp.’s US ground delivery unit. (NYSE: FDX), and Jay Winship, a financial executive, as independent directors.
In addition, Robinson’s board formed a four-person capital allocation and planning committee, which the company said would recommend capital allocation, operations and strategies, including increased transparency and disclosure to shareholders. The panel will be chaired by Winship and will initially include Scott Anderson, the company’s chairman, as well as Biesterfeld and Maier.