Following XPO Logistics’ takeover of US transport and logistics provider Con-way for $3 billion, the company has announced 190 planned redundancies in its less-than-truckload (LTL) business.
XPO said the layoffs would reduce annual costs by more than $20m. The company is aiming to make an improvement in profit of between $170m and $210m over two years. In the three months since the takeover, XPO reports having reached approximately $50m in “expected annualised savings”.
According to XPO, most of the reductions were in administrative, management and back office functions, and impacted less than 1% of the LTL workforce in North America. Thirty of the jobs were made in other parts of the business as a consequence of the acquisition of Con-way.
Following the takeover, XPO became the second largest LTL provider in North America.
“The integration of Con-way has given us the opportunity to engineer a leaner, more results-oriented LTL operation while improving on our industry-leading customer service levels,” said Tony Brooks, president of LTL for XPO Logistics. “We plan to double the number of strategic account managers over the next few months. Our focus is on growing LTL by expanding our service capabilities and cross-selling LTL to XPO's full customer base."
Brooks went on to say that the company was using the reorganisation to increase its capacity efficiency, improve transit times in key lanes, and make the network more productive.
XPO has also recently dismissed a number of executives from the contract logistics division of the former Con-way business. They include Menlo’s former president, Robert Bianco, its former COO, Gary Kowalski and Bob Bassett, the former Menlo’s vice president of sales and marketing.
The company said the decision was related to its integration of wider Con-way business into its global supply chain organisation, and the fact that existing XPO executives are already in place in North America and Europe.
“Bob Bianco and Gary Kowalski were both let go recently as part of our plan to eliminate redundancies following the acquisition,” XPO spokesperson, Gary Frantz, told Automotive Logistics. “Under the leadership of Ashfaque Chowdhury, who is XPO’s president of supply chain for the Americas and Asia Pacific, we're integrating the former Menlo operations into our global supply chain organisation, where we already have a seasoned executive team in place in North America and Europe.”
Frantz said that integration was “fitting together very nicely”, which was a credit to the supply chain team and reflected on the quality of the operations that Bianco and Kowalski had built over the past 20 years. “We wish them the best in their future endeavors,” he said.
Bianco was with Menlo for almost 20 years, with more than half that time as president. Kowalski was also at Menlo for 20 years.
A number of other executives from Con-way have moved to rival logistics provider YRW Worldwide. Chet Richardson, who worked at Con-way in a number of roles, has been named the vice-president of transportation at YRW Freight. Paul Lorensen, who was central area vice president of operations at Con-way, will lead the central divisions operations at YRW as division vice-president.
The latest departures follow the news that Julie Luna, XPO’s chief commercial officer, also left the company in October last year.