Workforce reductions affect non-sales positions like IT, human resources, and accounting and stem from XPO’s 2015 acquisition of less-than-truckload provider Con-way Freight.
XPO Logistics last week cut 190 back office and administrative positions from its less-than-truckload division in a planned reduction as part of its acquisition of Con-way Freight in 2015.
Chief Executive Officer Brad Jacobs told American Shipper the cuts were intended to help XPO grow profitability of the erstwhile Con-way by $170 million – to $210 million – within two years. He said last week’s job cuts, in addition to a previous round of reductions in fall, had helped achieve $50 million in annual cost reductions. Around $20 million is tied directly to the workforce reductions made Friday.
Jacobs noted the cuts were in non-sales-oriented divisions where there were redundancies with XPO’s broader organization.
“Con-way was extremely profitable,” he said. “But it could have been more profitable mainly because the back office was bloated. There were too many heads in IT, human resources, accounting. Non-revenue generating functions were overstaffed, and that was even before synergies with our organizations. That was the hold back to increasing profitably.”
Jacobs said the LTL division had lost few employees to attrition since the acquisition. He also stressed that cross-selling initiatives between XPO’s LTL business and its other divisions would intensify this year.
“Our new organizational structure is based on clearly delineated P&L responsibilities and customer service accountability at the field level,” XPO LTL President Tony Brooks said in a statement. “We’re also optimizing our footprint to increase the efficient use of our capacity, improve transit times in key lanes and make our entire network more productive.”
XPO cuts 190 LTL jobs in planned move
