Dive Brief:
- C.H. Robinson Worldwide’s workforce shrank by another 13.3% year-over-year in Q4 — its fifth consecutive quarterly decrease — resulting in a 15.3% YoY drop in employee expenses, the company reported last week.
- Like in previous quarters, the headcount reductions came through attrition, retirements, reorganization and elimination of roles, a company spokesperson said in an email to Trucking Dive. The brokerage employed 2,400 fewer workers last quarter than in Q4 2023.
- Companywide productivity has improved as the workforce’s size returned to 2021 levels last year. “I’m focused on ensuring that we’ll be ready for the eventual freight market rebound with a durable cost structure that decouples volume growth from headcount growth and drives operating leverage,” President and CEO Dave Bozeman told analysts on the company’s Q4 earnings call.
C.H. Robinson headcount falls sharply in 2023
Dive Insight:
The brokerage has tapped Bozeman’s experience in supply chain optimization to guide its cost reduction strategy, which it adopted in fall 2022.
C.H. Robinson doesn’t have a specific employee headcount number it’s trying to reach, according a company spokesperson, though it is focused on achieving productivity improvement targets.
The reductions reached a personnel line item target that the company identified previously. The company reduced its spending guidance in early 2023 and met its projection by controlling employee costs to under $1.47 billion for the year.
Personnel expenses for Q4 fell to $361.8 million primarily due to cost optimization initiatives and lower compensation, the company reported.
Efficiency initiatives overall for the year saved the company $346 million, which was more than the $300 million the company projected in April, according to CFO Mike Zechmeister.
“Consistent with our strategy, we believe these cost savings will improve our operating leverage and help our margins as demand and a more balanced freight market return,” he said.
Zechmeister said the company is seeing results from improved efficiencies, which it has achieved through increased use of artificial intelligence and other technologies. For the year, its North American Surface Transportation segment saw 17% productivity improvement and while Global Forwarding experienced a 20% productivity boost.
The company is targeting another 15% improvement in its surface transportation business and another 10% improvement in global forwarding in 2024, Zechmeister said. The company will continue seeking ways to eliminate waste in its processes, he said.
“(C.H.) Robinson is positioned well to further reduce waste and drive structural cost changes that improve our operating leverage and help deliver on the long-term operating income margin expectations,” Zechmeister said.
