Arrive Logistics, the Austin, Texas-based freight brokerage with offices in Chicago and Chattanooga, told employees today, April 3, that it was cutting approximately 10% of its workforce in response to the coronavirus pandemic’s effect on freight markets.
About 110 people lost their jobs – 75 positions were terminated and 35 were furloughed, the company said, until Arrive had more confidence in the strength of freight markets. An additional 25 employees were repositioned to other roles internally, primarily out of customer sales positions.
Arrive’s chief people officer Chelsea Woodhead said that the company offered terminated employees severance packages, extended their health insurance by several months, waived their non-compete clauses, and was working with recruiters and other logistics companies to help affected employees find new jobs in the industry.
Management spent Friday morning and early afternoon individually notifying employees who were directly affected before calling an all-hands meeting later in the afternoon. About 60% of Arrive’s employees are in Austin, 30% are based in Chicago, and 10% are in Chattanooga. Arrive said that the headcount cuts were distributed proportionally across the offices.
“It’s a difficult decision and conversation,” Woodhead said. “We’re a people-first organization, and we carried that philosophy into how we handled this. We take our people very seriously and wanted to treat these conversations with the most respect we could give them.”
Arrive’s chief executive officer Matt Pyatt said his team assessed market conditions through a data-driven process and gradually came to the decision to pivot the company.
“About three or four weeks ago as the COVID-19 situation continued to materialize, we sat down and started talking about how it would affect our business,” said Pyatt. “We looked at all of these different industries and how they’re going to be affected, and then looked at our internal book of business. We thought food and beverage, consumer staples, and medical supplies were going to be stable, but a lot of the other industries we serve were going to be challenged.”
Pyatt said that he and co-founder and president Eric Dunigan were deferring 100% of their compensation and that Arrive’s senior managers were also deferring portions of their compensation.
“Our model is changing and we’re constantly diving into it, but we wanted to build something with a high level of confidence so we have the right teams and roles to support the business,” Pyatt said, noting that he had been in close contact with industry and analysts and other brokerage executives to develop his outlook.
FreightWaves published proprietary research on March 26 noting that contracted truckload volumes had peaked on March 23; since then, the contraction in volume has continued and accelerated.
Woodhead said that Arrive employees were already working from home, and that teams had proven incredibly resilient in adjusting to work-from-home. Now the company is faced with the task of retraining and re-deploying team members to new divisions while working remotely.
“Managers are using all the tools available to them,” Woodhead said. “People have responded to that transition in a really positive way, even with the repositions. We are fully confident in our management team and their ability to handle those transitions.”
Arrive had an aggressive summer hiring plan before the pandemic spread, and Pyatt said that hiring was now paused, although the company is maintaining contact with people who had open employment offers.
“We are focused on servicing our customers and carriers and coming out of this stronger than we were before,” Pyatt said.
Eric
Well said, Dave. Agreed 100%. Any “people first” org should at least aim to strike some form of balance when it comes to a mass-layoff strategy. Having eveyone take a small paycut seems like the “people first” approach, but for those liad off, it’s likely a blessing in disguise.
As for the annoying “Art” clown who keeps chiming in, he’s likely one of the freight broker bottom feeders – perhaps even an employee of Arrive,
Dave
Art, I do. And assets. But if you are right then the owners and execs in the article should be honest then and just say “we can employ as many or as little as we want so we just let 10% go as it’s our right”. But THEY didn’t say that. Quite the opposite. Don’t pretend to the press that you care if you don’t.
Art it sounds like nobody employs you. Your attitude toward these fellow humans perhaps shows that you wouldn’t be the best manager or team leader.
We will all be judged by our compassion to others.
Art
My apologies Dave, I forgot my ‘public relations’ hat while writing that comment.
I agree with you. Compassion is critical.
PR image is essential in the era of social media.
Dave
Wouldn’t it have been nicer if they had just cut EVERYONE’S pay by 10% which would have spread a little pain to all but saved absolute devastation to 105 people and families?
That’s what a real “people first” company would have done. No?
Art
They cut the least productive.. so a win-win for AL.
Why you whining?
Businesses don’t need to employ anyone.
Employment is not a right.
If you don’t like how they run their business, start your own brokerage.