YRC Worldwide Sheds 180 Management and Other Nonunion Jobs as Quarterly Loss Doubles
Overland Park, Kan.-based YRC Worldwide Inc. said that its financial loss doubled in the first quarter and that it cut 180 management and other nonunion jobs in a streamlining effort to make the trucking business more efficient.
The job cuts were accompanied by other cost savings in the company’s dealings with “external professionals,” such as consultants, and from increased collaboration among its four companies that combined duplicate departments.
RELATED: YRC Worldwide loses $25.3 million in first quarter, misses analyst estimates
YRC Worldwide owns YRC Freight, a national less-than-truckload carrier, and three regional trucking companies, New Penn, Holland and Reddaway.
YRC ranks No. 5 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
CEO James Welch said that although the four businesses were collaborating more, there are no plans to merge them. He also said the job cuts were part of a normal review of operations.
Welch called the quarterly results “somewhat disappointing,” but he said the company’s “fundamentals” were improving and that better results lie ahead.
“We feel good about the rest of the year,” he said during a conference call with analysts.
Costs will be about $25 million lower because of the changes, including job cuts that triggered some severance costs. Welch said $16 million of the cost savings will come at YRC Freight and $9 million at the regional carriers.
YRC Worldwide said it lost $25.3 million, or 78 cents a share, during January, February and March. A year earlier, it had lost $12 million, or 37 cents a share.
Its freight operations lost $3 million in the quarter after posting a $13.4 million profit a year earlier. Interest expenses increased the recent loss and turned the operating profit from a year ago into a net loss.
Revenue in the first quarter were $1.17 billion, up from $1.12 billion a year ago. YRC said its profits fell in part because it collected less revenue for each 100 pounds of freight it hauled. Winter weather also had an impact.
The company has renegotiated price contracts with a number of customers and expects that to help improve financial results in the remainder of the year.
