Freight brokerage and third-party logistics (3PL) firm Coyote Logistics is thinning the herd at its business, giving “a relatively small” number of employees the option to leave the UPS-owned company.
According to a Coyote spokesperson, the separation program is fully voluntary. It is undetermined how many employees received the notice.
This would be the fourth round of staff cuts this year at Coyote, which also announced layoffs in January, May and September.
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“We evaluate our corporate structures on an ongoing basis to identify opportunities to operate more efficiently as an organization,” the Coyote representative told Sourcing Journal. “To support current optimization initiatives, a small number of employees are being given the opportunity to pursue voluntary separation.”
Coyote, which operates under the Supply Chain Solutions unit of UPS and moves an estimated 10,000 loads every day for its 15,000 shipper partners, began a restructuring plan in September amid its third set of job cuts. The reorganization was one of the first initiatives led by CEO Sandeep Pisipati, who Coyote unveiled as its new chief on Aug. 31. Pisipati had served as the logistics company’s chief financial officer since 2018
In a year that was filled with economic uncertainty, Coyote’s restructuring and apparent downsizing reflects the industrywide freight recession characterized by weaker consumer demand, declining freight rates and an excess of carrier capacity among all modes of shipping.
Freight brokerages in particular, like Flexport and now-defunct Convoy, saw significant revenue declines amid the slow demand and decreasing freight volumes, as they’re getting fewer opportunities to organize orders between shippers and carriers. Fewer transactions means less money made through brokerage fees, the primary revenue source for these businesses.
On top of that, many of these firms hired excess employees during the Covid-19 pandemic, as freight rates and shipment volumes were at all-time highs.
According to the November Cass Freight Index, total shipments fell 8.9 percent year over year, after a 9.5 percent annual decline in October. And freight rates calculated by the index fell even further from last year, 18 percent in November, after falling 15 percent in October.
Job cuts in logistics have been consistent across the industry, whether it be brokerages, 3PLs or technology firms, and range from established industry leaders like Amazon, UPS, FedEx, DHL, C.H. Robinson and Maersk to startups. When trucking giant Yellow filed for bankruptcy and ceased operations, 30,000 employees lost their jobs.
Other organizations that have endured staff reductions include trucking company U.S. Express, contract logistics provider GXO and software providers like Flexe, Project44, Freightos and FourKites,
TuSimple cuts 75 percent of remaining U.S. jobs
Autonomous trucking company TuSimple is closer to winding down its U.S. business, cutting staff in the country by approximately 150 employees, representing 75 percent of the market’s workforce and 19 percent of the company’s global team.
The announcement seemed inevitable at some point—the company previously disclosed its strategy to pause freight revenue operations in the U.S. and evaluate strategic alternatives for the American business in June. TuSimple still is considering a sale of the U.S. operations or a sale of certain assets in the market, as the company aims to shift its focus to the Asia-Pacific region.
Following the job cuts, which are part of a wider restructuring plan first implemented in December 2022, the company will have approximately 700 global full-time employees.
The driverless technology firm currently estimates that it will incur one-time charges of approximately $7 million to $8 million in connection with the restructuring plan, consisting primarily of cash expenditures for employee transition, notice period and severance payments, employee benefits and related costs.
The majority of the restructuring charges will be recorded in the fourth quarter of 2023, and the full execution of plan will be “substantially completed” by the end of the fiscal year 2024, TuSimple said in an SEC filing.
TuSimple wasn’t the only AV company dealing with major organizational overhaul. General Motors’ Cruise robotaxi unit revealed Thursday it was axing 24 percent of its workforce, or 900 employees.
The company recently dismissed nine executives weeks after it had to recall all its vehicles from testing in the U.S. The recall came after an Oct. 2 incident in which a woman was struck and dragged by a vehicle. CEO Kyle Vogt and co-founder Dan Kan both resigned in recent weeks. A safety investigation is ongoing.
