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Dive Brief:
- Forward Air laid off workers last week as part of its push to reduce costs and a quick return to profitability, a company spokesperson said in an email to Trucking Dive.
- The job cuts were deemed necessary as the LTL company continues to integrate the operations of its recent and tumultuous acquisition of Omni Logistics. The spokesman did not disclose the number or type of positions eliminated.
- “We have made the difficult decision to reduce our workforce as part of our previously announced efforts to improve Forward’s financial performance,” the spokesperson said. “It was necessary to right-size the combined companies and achieve the cost reductions discussed in our first quarter earnings call.”
Dive Insight:
Forward Air has faced many challenges since announcing in January that it had closed its deal to merge with Omni. The combined businesses were envisioned to create a $3.8 billion LTL and brokerage behemoth operated by a national warehouse and distribution network.
As the company worked to combine the businesses, Forward Air saw its first-quarter earnings fall 239 percent. It also suffered an operating loss of $66 million for the quarter, with much of that coming from severance and operating expenses related to the Omni Logistics acquisition.
The layoffs follow the departure of Forward Air’s previous CEO and CFO in the wake of the merger. Chairman, President and CEO Tom Schmitt was replaced by CVEA Logistics executive Shawn Stewart in April, and CFO Rebecca Garbrick was replaced on an interim basis by former Yellow Corp. CFO. Jamie Pierson.
The company has also faced a backlash from some shareholders who have filed lawsuits seeking merger relief and unspecified damages.
Despite efforts to undo the merger, Forward Air hasn’t looked back. During the first-quarter earnings call, Garbrick said many of the expenses related to the Omni Logistics acquisition were expected to be one-time costs that would not recur in the second half of the year.
Forward Air is actively exploring the sale of other parts of its business. Chief legal officer Michael Hance told analysts the company was working on a plan to divest non-core assets in 2024.
Forward Air in December sold its last-mile operations to logistics specialist Hub Group for $262 million.