Dive Brief:
- C.H. Robinson reduced its headcount by 14.2% in year-over-year in Q3, translating to a 21.5% drop in year-over-year personnel expenses, the company reported last week.
- The company laid off 300 workers in May and achieved additional reductions since then through attrition, retirements and by reorganizing and eliminating roles, a spokesperson said in an email to Trucking Dive. Average daily headcount slid by 2.4% from Q2, CFO Mike Zechmeister said during an earnings call.
- President and CEO Dave Bozeman said the company’s strategy to streamline its processes has led to “meaningful cost reductions and productivity gains across our business that are ahead of our stated targets.”
C.H. Robinson headcount falls sharply in 2023
Dive Insight:
The brokerage has focused on cost reductions since last fall as weak freight conditions persisted. Fewer employees at the end of Q3 resulted in a 13.1% YoY drop in operating expenses to $521.3 million, the company reported.
Personnel expenses decreased 21.5% to $343.5 million, primarily due to cost optimization efforts and lower compensation, the company said.
C.H. Robinson projects ongoing efficiency initiatives will result in further declines in annual personnel costs ranging between $1.43 billion and $1.45 billion, a drop from its previous range of up to $1.55 billion.
Escalating efforts to automate internal processes and boost productivity with reduced headcount through artificial intelligence has been C.H. Robinson’s strategy since Arun Rajan was promoted to COO last fall. He spent time overseeing technology initiatives at Amazon subsidiaries Whole Foods and Zappos before joining the brokerage.
Rajan said use of generative AI during the final week of Q3 created more than 10,000 transactional quotes, showed potential to scale and grow, and could lead to more productivity improvements.
Productivity gains led to an 18% year-to-date increase in shipments per person per day in its North American Surface Transportation business, Bozeman said during the call.
That segment, which experienced a 3.5% volume decline, also saw a 22% Q3 drop in operating expenses, the CEO said.
Global forwarding reported a 12% YoY drop in operating expenses, Bozeman said, which he also credited to improved productivity.
“We're laser focused on driving productivity, as well as growth, whichever one will do it in combination in driving, so that's super important,” he said.
