Dive Brief:
- C.H. Robinson expects its headcount reduction strategy will help the company cut an additional $100 million from its 2023 personnel expenses.
- CFO Mike Zechmeister told analysts during the company’s April 26 earnings call that its headcount at the end of Q1 was 16,400, about 1,000 fewer compared to its total at the end of Q4.
- A combination of personnel reductions, streamlined operations and technology advancements allowed C.H. Robinson to lower its 2023 personnel expense guidance to between $1.45 billion and $1.55 billion, down from an earlier estimate of between $1.55 billion and $1.65 billion, the CFO said on the call.
Dive Insight:
As C.H. Robinson continues to seek greater operational efficiencies, it expects its headcount to “decline throughout 2023,” Zechmeister said. He noted that the company’s headcount has been reduced by 1,500 since Q3.
C.H. Robinson cut 650 jobs in November in a bid to reduce costs.
Regarding future changes, a company spokesperson declined to clarify whether further headcount reductions could mean more layoffs or other moves such as the elimination of positions or leaving open positions unfilled.
Jonathan Phares, assistant professor of supply chain management at Iowa State University, said in an email to Transport Dive that headcount reductions can be achieved through a combination of actions, including freezing job openings or not filling a vacated position.
However, this approach takes more time and may not yield savings quickly enough for companies facing rising costs and declining revenues.
“At that point, they initiate broader layoffs,” Phares said. “Reduction through attrition is preferable because it is less disruptive."
As trucking companies ride out a weak freight market, brokerages also must cope with lower volumes. Analysts were critical of C.H. Robinson’s ability to adapt to changing market conditions, which likely weighed on the company’s decision to find a new CEO, which it expects to name in Q2.
Cost control through headcount monitoring has been a priority of C.H. Robinson’s for multiple quarters. The company reported its Q1 personnel expenses decreased 7.3% to $383.1 million, partly due to reduced headcount and lower variable compensation.
