Dive Brief:
- Forward Air laid off workers last week as part of its push to reduce costs and fast-track a return to profitability, a company spokesperson said in an email to Trucking Dive.
- The job cuts were deemed necessary as the LTL carrier continues to integrate the operations of its recent and tumultuous acquisition of Omni Logistics. The spokesperson 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 on our first-quarter earnings call.”
Dive Insight:
Forward Air faced many challenges since announcing in January it had closed its deal to merge with Omni. The combined businesses were projected to create a $3.8 billion brokerage and LTL giant that operated a national warehouse and distribution network.
As the company worked to combine the businesses, Forward Air saw its Q1 year-over-year profits tumble 239%. It also suffered a $66 million operating loss for the quarter with much of that coming from severance expenses and operational costs related to the Omni Logistics acquisition.
The layoffs followed 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. finance chief Jamie Pierson.
The company also has faced an uprising from some shareholders who have filed lawsuits seeking the recession of the merger and unspecified damages.
Despite attempts to undo the merger, Forward Air has not looked back. During its Q1 earnings call, Garbrick said many of the expenses related to the Omni Logistics acquisition were expected to be one-time only costs that wouldn’t repeat in the second half of the year.
Forward Air is actively exploring selling other parts of its business. Chief Legal Officer Michael Hance told analysts the company was working on a plan to divest noncore assets in 2024.
Forward Air in December sold its final mile business to logistics specialist Hub Group for $262 million.
