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Dive Summary:
- TFI International cut salaries at Daseke headquarters by at least $12 million a year, TFI Chairman, President and CEO Alain Bédard said during a first quarter earnings call.
- The Canada-based freight giant is cutting costs by 75% at its Daseke headquarters over the next two years, the CEO said on the call. TFI expects to spin off Daseke late next year or early 2026, he said.
- “Daseke headquarters was the cancer,” Bédard said. “These guys were costing a fortune and the results weren’t there. Well, we did a little cleaning.”
Dive Insight:
The corporate pay cuts at Daseke demonstrate that TFI has no qualms about asking the new billion-dollar acquisition to do “more with less” – something management is instructing its other businesses to do.
TFI integration hopes Dasekewhich it acquired in April, will help scale and strengthen TFI’s trucking business, which suffered the most in another difficult quarter.
TFI’s total operating income fell to $151.6 million in the first quarter, compared to $166.4 million in the first quarter of 2023, according to an earnings announcement. Truck operating income fell 41% year over year to $41.5 million in the quarter.
TFI attributed the overall decline in operating income to weaker market conditions. ONE Producer Price Index for long distance TL general freight has been around the same level for all of Q1.
Daseke’s corporate headquarters cost about the same as TFI’s headquarters to operate, indicating that headquarters costs were “through the roof,” Bédard said.
Apart from the head office, most of Daseke’s business units are performing well, the CEO said.
“There are maybe one or two that are subpar, OK, that we’ll have to work on,” he said.