Freight brokerage firm Coyote Logistics, a wholly owned subsidiary of UPS (NYSE: UPS), told employees on Friday it is conducting a second round of layoffs this year, signaling continued pressure in the freight market.
The number of people and locations of those affected were not disclosed, although sources said employees at multiple offices were notified of cuts.
In a memo sent to affected staffers Friday and acquired by FreightWaves, Coyote’s human resources department attributed the cuts to months of truckload rate deflation, adding: “To maintain our business health and performance, we must make strategic decisions that position us for long-term success. This includes optimizing our organizational structures and workforce, which brought us to this difficult decision.”
It’s the second time this year the Chicago-based company, which operates in 16 offices worldwide, has laid off employees. In February, the company reportedly cut 200 workers. And in 2020, the company laid off 55 people — 30 IT workers at its Chicago headquarters and 25 carrier representatives at its Chattanooga office.
In 2015, UPS acquired Coyote for $1.8 billion. Since then, Coyote has doubled in size, with estimated 2022 revenue of $3.8 billion. Coyote’s revenue story hasn’t always been up and to the right, though: 2022 revenue was markedly lower than 2021’s $4.7 billion.
In the past several years, UPS corporate management has made a series of changes to the brokerage, including reducing incentive-based compensation, removing carrier reps’ visibility into their margins per load and aggressively enforcing noncompete clauses — even against non-revenue-generating employees like carrier reps — in an attempt to reduce churn and control costs.
The layoffs at Coyote come at a time of widespread reductions in head count across the transportation and logistics industry.
This week, autonomous trucking software developer TuSimple announced it would cut 300 jobs, or 30% of its global workforce, just five months after cutting 350 jobs in December. Last week, broker C.H. Robinson Worldwide laid off 2% of its staff, or 300 people; the company also had a round of layoffs in November, cutting 650 positions. U.S. Xpress recently cut 150 jobs as its earnings report filed with the Securities and Exchange Commission showed a significantly widened loss for the truckload carrier. That news came on the heels of the announcement that the company is being acquired by Knight-Swift (NYSE: KNX).
Read more: What’s behind the never-ending freight brokerage layoffs