TFI International (NYSE:TFII) revealed Tuesday that it has laid off more than 1,600 employees and cut executive pay as Canada’s largest transportation company attempts to weather the economic fallout of COVID-19 in North America.
TFI disclosed the cuts as it reported net income C$75.8 million in its first-quarter financial results, a 16% increase compared with a year earlier. Revenue remained relatively flat, increasing by 1% to C$1.24 billion.
The company began taking steps to cut costs at the beginning of March as COVID-19’s spread intensified “with an eye toward helping TFI emerge even stronger when conditions normalize,” TFI CEO Alain Bedard said in a statement.
TFI said it expects that layoffs will be temporary. Meanwhile, the company cut the work schedules of nearly 1,100 employees to four days per week and reduced executives’ pay by 5% to 15%.
The layoffs represent more than 9% of TFI’s employees.
“Looking ahead, as our highly engaged workforce continues to serve our customers and as we execute on our strategies to create long-term shareholder value, our thoughts remain with the many families impacted by today’s economic disruption,” Bedard said.
TFI did not detail the locations or business segments of the cuts. The company operates trucking, logistics and final-mile businesses primarily in Canada and the United States.
The Montreal-based company continued to grow profits in 2019 in large part on the efficiency of its core trucking businesses. Declining freight volumes in Canada and the U.S. will test TFI’s ability to squeeze more out of less freight.
In February, Bedard told analysts that its asset-light model, particularly with its logistics and final-mile businesses, was well positioned for a possible recession.
“So if there’s a storm, if there’s a recession … we’re ready,” Bedard said.