Dive Brief:
- Old Dominion Freight Line’s employee headcount could be down as much as 10% YoY by the end of June, with CEO Greg Gantt saying during an earnings call that the carrier has worked to tighten its belt.
- The company reported a 5.4% YoY drop in headcount in Q1 through attrition and “other decisions,” CFO Adam Satterfield said on the call. Old Dominion hit the brakes on hiring last year and realized more than $5 million in YoY savings in part by reducing hours to align with declining demand.
- "We choose to tighten our belt and manage our labor," Gantt said on the April 26 call. "And when the slow times pass, we're in a great position."
Old Dominion’s headcount declines after last year’s peak
Dive Insight:
Satterfield said the falling headcount in Q1 was the result of the company reducing its size in the face of sluggish demand. Overall daily LTL tonnage dropped 12% in Q1, shattering hopes for a Q2 bounceback.
A 9% to 10% YoY drop in headcount in Q2 would represent Old Dominion’s workforce coming back into balance, the CFO said. Shipments per day were down double digits YoY in April.
“The change in headcount typically reconciles with the overall change in shipment count as well," Satterfield said.
Other LTL carriers are similarly adjusting their workforce spending in a tough economy.
FedEx Freight announced another round of furloughs as it closed 29 locations, and XPO expects to realize more than $50 million in annualized labor-related cost savings in Q3.
