One of Canada’s largest transportation and logistics companies, Mullen Group, announced on Friday plans to temporarily lay off some employees, cut executive pay and suspend its monthly dividend as it braces for impact of the coronavirus pandemic on freight.
CEO Murray Mullen said while “business remains robust” — particularly in less-than-truckload — the company expects the economic fallout to hit some segments.
“So we will have business but clearly as many industries temporarily close, the demand for trucking and logistics service will be impacted,” Mullen said in a statement.
The announcement came as the COVID-19 pandemic took an increasingly staggering toll on Canada’s economy. Earlier on Friday, Prime Minister Justin Trudeau said 500,000 people, accounting for 2.5% of Canada’s workforce, had applied for unemployment benefits in the past week as the number of confirmed COVID-19 cases topped 1,000 in Canada.
Despite the fallout of the pandemic, Mullen said “a large portion of our overall business will continue to be required to meet the daily needs of Canadians.”
Mullen did not provide details on the layoffs but stressed they were temporary. However, the company said it would provide up to C$5 million in assistance for employees affected.
“Our first priority must be to look after those employees, and their families,” Mullen said.
The company will also suspend its monthly dividend of C$0.05 for three months beginning April 1 and reduce pay of senior executives and directors.
Nevertheless, Mullen stressed that the company remained sound, pointing to the more than C$90 million on its balance sheet.
“Mullen Group is extremely well-positioned to weather this extraordinary situation,” he said.
Mullen Group’s network of transportation and oil service business stretches from Ontario to British Columbia. Transportation and logistics account for the majority of its business.
The company’s less-than-truckload business has been a strong performer even during the market headwinds in 2019 on the strength of Canadian consumers.