XPO begins layoffs of former Con-way staff

XPO Logistics, which announced Friday it had finalized its $3 billion acquisition of trucking and logistics provider Con-way Inc., will cut more than 10 percent of current Con-way staff at its Ann Arbor, Mich. headquarters and Portland, Ore. IT center.    XPO Logistics will cut more than 10 percent of former Con-way Inc. staff at the latter’s Ann Arbor, Mich. Headquarters and Portland, Ore. IT center, according to reports from logistics and supply chain news outlet DC Velocity. DC Velocity said an estimated 2,500 to 3,000 employees work at both locations.
   The news comes just a few days after XPO announced it had finalized its $3 billion acquisition of the asset-based truckload and less-than-truckload (LTL) transportation services provider. All four of Con-way’s subsidiaries – LTL carrier Con-way Freight, Con-way Truckload, Con-way Multimodal, and third-party logistics provider Menlo Logistics – have all been rebranded as XPO Logistics.
   The report from DC Velocity cited an “individual familiar with the situation,” who said an entire strata of current Con-way upper management would be eliminated in the layoffs. That particular section of the Con-way management team was deemed to no longer be adding enough value to the newly-merged company and its removal will result in a savings of approximately $28 million a year, according to the individual.
   A group of about 80 employees dedicated to the development and implementation of “Lean” management principles, a program that Con-way has championed for years, are also reportedly in the cross-hairs. Lean management is a systematic approach to running an organization through the elimination of waste, highlighting processes that add value while supporting continuous improvement in efficiency and quality.
   Shortly after XPO announced its purchase offer for Con-way in September, however, CEO Bradley Jacobs with met the leaders of Lean implementation in Ann Arbor, and said he was unsure if the benefits of such a program justified the headcount and expenditure.
   DC Velocity said the current layoffs include employees in administration, operations, sales, and information technology, but XPO declined to comment on the specifics.
   Con-way’s truck drivers are not likely to be included in the workforce reduction, according to the unnamed source, but there could still be further rounds of layoffs yet to come.
   The individual said XPO will require the remaining Con-way executives to sign a two-year noncompete agreement, a move that could result in an exodus of top-level employees as even those who want to stay may not like the idea of not being allowed to jump ship should a better opportunity arise.