This sound is generated automatically. Let us know if you have any feedback.
Dive Brief:
- CH Robinson cut its headcount by 14.2% year-over-year in the third quarter, which translates into a 21.5% drop in personnel costs year-over-year. the company said Last week.
- The company laid off 300 workers in May and has achieved additional reductions since then through attrition, retirements and restructuring and eliminating roles, a spokesperson said in an email to Trucking Dive. Average daily headcount was down 2.4% from the second quarter, 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 “significant cost reductions and productivity gains across our business that are above our stated goals.”
CH Robinson headcount to drop sharply in 2023
Average number of brokerage staff per quarter
Dive Insight:
The brokerage has focused on cost reduction ever since last fall as freight conditions remained weak. Fewer employees at the end of the third quarter led to a 13.1 percent year-over-year decline in operating expenses to $521.3 million, the company said.
Personnel expenses fell 21.5 percent to $343.5 million, mainly due to cost optimization efforts and lower compensation, the company said.
CH Robinson plans ongoing efficiency initiatives will lead to further reductions in annual personnel costs of between $1.43 billion and $1.45 billion, down from a previous range of up to $1.55 billion.
Scaling up efforts to automate internal processes and boost productivity with reduced headcount through artificial intelligence has been CH 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 the use of genetic AI during the last week of the third quarter generated more than 10,000 transaction offers, showed potential for scaling and growth, and could lead to more productivity improvements.
Productivity gains led to an 18% year-to-date increase in shipments per person per day at North American surface operations, Bozeman said during the call.
That segment, which saw a 3.5 percent drop in volume, also saw a 22 percent drop in third-quarter operating expenses, the CEO said.
The global promotion reported a 12 percent year-over-year reduction in operating expenses, Bozeman said, which he also credited to improved productivity.
“We’re laser-focused on increasing productivity, as well as growing, whoever is going to do that in combination with driving, so that’s hugely important,” he said.