Yellow, the third-largest less-than-truckload company that’s in the midst of financial chaos, said in a memo to laid-off, nonunion employees viewed by FreightWaves that the company is “shutting down regular operations” on Friday.
All locations will be closed and/or lay off some number of employees. As the memo stated:
“We regret to inform you that your employment with Yellow Corporation, or one of its subsidiaries, (collectively referred to as the ‘Company’) will permanently terminate on July 28, 2023, or within 14 days after (the ‘Separation Date’). The Company is shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations, including yours (the ‘Shut Down’).”
The company on Friday morning laid off an unknown number of office employees, most of which were nonunion. It said in a memo to the laid-off employees that it was unable to alert them previously of this closing of business “because the Shut Down was not reasonably foreseeable.”
John Murphy, who is the Teamsters National Freight director, advised union employees to collect their belongings from all offices and terminals, in the case that Yellow shutters in the coming days and facilities are not accessible.
Murphy noted Teamsters is continuing to look for financing solutions for Yellow. However, he wrote, “the likelihood that Yellow will survive is increasingly bleak. Yellow continues to clear its system, and it appears to be laying off personnel and closing entire terminals across the country. All Yellow employees should, in our opinion, prepare for the worst, as Yellow appears to be headed to a complete shutdown within the next few days.”
Employees were notified of the layoffs on Friday morning in voice-only calls. At least three executives laid off large portions of their teams:
- Yellow Chief Information Officer Annlea Rumfola informed her team of some 300 technology employees that Friday was their last day, according to an employee on the call.
- Steve Selvig, vice president of customer care at Yellow, informed an unknown number of customer service employees that Friday was their last day, according to an employee on the call and a local news publication.
- Yellow Chief Commercial Officer Jason Bergman invited the following teams to a call that said Friday was their last day: local sales divisions 1, 2 and 4; all inside sales; multiple regions of corporate sales; exhibit operations managers; and Yellow third-party logistics sales. This came from two employees on the call. FreightWaves reviewed screenshots of emails sent before and a recording of the call. A Yellow representative told FreightWaves after publication that not all teams invited were laid off.
These layoffs come ahead of a potential Yellow bankruptcy filing. A senior vice president said Yellow is expected to file for bankruptcy on Monday, according to three employees who attended an internal call in which the executive shared this news.
Terminated employees were instructed to receive information regarding their severance pay, health care, W-2s, and other key documents through an Oracle platform, as their access to company systems will be terminated on Friday. According to a memo distributed to terminated employees viewed by FreightWaves, severance for nonunion workers depends on title and length of tenure at the company:
It’s unclear why the Yellow third-party logistics sales team was invited to the layoff call, as the company is actively seeking to sell its logistics arm. A Yellow representative said in an emailed statement after the story was published that the Yellow Logistics organization has remained intact, including the Yellow Logistics salesforce.
A Yellow representative said in an emailed statement to FreightWaves after the story was published that customers can contact Yellow’s support line at 800-610-6500 or customer.care@myyellow.com.
“Yellow has retained a robust customer service team that is fully capable of handling inquiries and assisting with all support that customers might need,” the representative said.
Yellow, a 99-year-old company headquartered in Nashville, Tennessee, employs some 30,000 workers. About 22,000 of them are represented by the Teamsters union. Teamsters and Yellow have been locked in a monthslong strife over changing key work rules at the trucking fleet. Now, sources say Yellow may file for bankruptcy imminently.
In a call to Yellow sales teams, Bergman shared a statement on the company’s potential shuttering — and pinned the blame on the Teamsters’ refusal to negotiate with the company:
“Since last January, we have made every attempt to meet with the IBT. The IBT’S refusal to negotiate for nine months, its freezing of our essential business plan, One Yellow and, finally, its strike authorizations caused customers to find alternative freight carriers and it’s had a catastrophic effect on our business. When IBT leaders were finally ready to meet this week, it was too late. By then, the IBT strike threat had already a devastating impact on our business, [unclear] investors and causing customers to quickly depart. Given this impact to our business, we are forced to announce additional headcount reductions of non-union employees.”
In a memo published to members Thursday night, Teamsters blamed Yellow’s management for the company’s financial issues:
“In the meantime, TNFINC and the IBT continue to try to work with the Government to determine whether there is a way to protect the Teamster families at Yellow. TNFINC and the IBT remain willing to work with Yellow and its lenders or potential lenders. Hope, however, is fading. Unfortunately, despite more than a decade of concessions totaling billions of dollars given to the Company by Teamster members as well as a massive government bailout loan in 2020, Yellow may finally be succumbing to its enormous debt burden.”
This story is developing. Check back here for updates.
Are you a Yellow employee with a story to share? Email rpremack@freightwaves.com.
Sean O,Brien is too Blame no doubt about it
Make no mistake about it Sean O,Brien is responsible for the accelerated demise of Yellow freight!!! Period!!!! All the teamsters had to do was allow the second faze of the change of operations and we would have seen by the expiration of the contract in 2024 if it was working or not. But instead Sean decided that stopping 600 Road drivers from moving a couple of bills an hour on the dock was worth 22,000 teamsters losing there jobs!!!! Yellow caused the debt but they would have obtained the financing and would have been just fine. $29 an hour and free paid healthcare for everyone’s family!!! Now families will go bankrupt!! 22,000 a number Sean can live with!!! Where did you eat tonight Sean? Ruth Chris steak house! 22,000 teamsters are going to bed tonight with knots in there stomachs!! Thanks for your failure to represent us!! I hope somebody starts a class action lawsuit for your failure to represent!
JP-Michaels
I’m pretty sure that the leadership won’t have any problems to collect their stuff from their office and don’t have to worry about financial hardship like the gentleman who was seen in the video a few days ago.
An old Yellow manager
I left 10 years ago and after 40 years in LTL, 30 with Yellow, I ended my work life with the railroad. Teamsters and management had been fighting for years and all the knowledgeable customers watch that closely, especially after the CFW disaster and the debt issue. Plenty of blame to share. So sorry for all the hurt families.
Craig
Don’t blame the Teamster for Yellow stupidity. This is all on Yellow mismanaged CEO,CFO,COO AND THE REST OF THE IDIOTS. This is been going on for a long time. I’m sorry all the jobs were lost but you all new this was coming for years. Yellow took a great depth free company and ran it into the ground.
Mike Driver
Preston Trucking was one of the top ten companies in America to work for. What happened to them? Yellow bought them, then after bleeding concessions out of the union work force, shut them down. Then they bought another great company, Roadway, thinking they would double their tonnage. That didn’t work and they almost lost the company then. But they went back to their old trick and bled the union work force again, this time taking 15% of their pay and only paying 25% of their pension. Yellow, Holland, New Penn and Reddaway workers performed under these conditions for 15 years helping to keep this terribly mismanaged company afloat. Then Yellow got over 700 million from the government and one of the first things Yellow management did after receiving the money was give themselves bonuses. Yellow management has no one to blame for this debacle other than their own greedy, ego driven self.
Digital Dan
Teamsters doing what Teamsters do… bankrupting companies.
Onward Yellow
Many are wondering about the 700 million given to Yellow. But no one bothered to question the perverted unimcumbered process of selecting Yellow’s operation partner In Mexico: Fletes Mexico (Chihuahua) and the manipulative clan that heads it: the Gomez. No one had the good sense of questioning the fact that the same family owned Mexican company stayed as their operating partner for well over 30 years. Not even after Yellow merged with Roadway Express in 2008 did the Mexican Operating partner role become up for a true bidding. The operation in Mexico was always a bottomless pit: expenses after expenses on top of expenses. And the Yellow managers charged with overseeing Mexico were all bought out by the Gomez. That should not have happened. Yellow was broken by the union and the traitors within. The former will face the hardship of their choices. But I am afraid the latter will simply move on to the next target company peddling their “Mexico knowledge” and bringing along the rest of accolades to take over yet another company. Much like locust.
Real Teamster
I have read all of the preceding comments. I agree, the Teamsters General President refusing to meet with Yellow for several months pounded the final nail in the coffin. Mr. O’Brien may be having to answer for that in a class action lawsuit against the IBT as well as him personally. But, that coffin had lots of nails in it already; lots and LOTS of nails. Those were pounded in primarily by inept senior management at Yellow. The company has been poorly run for decades, but the big problems started 20 years ago.
The CEO at the time bought Roadway, paying far more than it was worth. Why he didn’t merge the operations by 2004 or at the latest, 2005 is beyond sensibility. Then in 2005 he bought the USF group, paying nearly three times what the financial gurus said it was worth. USF was comprised of five companies: Reddaway, Holland, Dugan, Bestway and Glen Moore. Trouble is, both of these gigantic purchases were made with borrowed money. Dugan and Bestway were shut down very quickly, but for a short time in the west and midwest, there were five companies competing for the same business, all owned by Yellow. Ridiculous!!! We have been fighting a monsterous debt burden ever since, and it finally caught up to us.
Add in absurd executive salaries and “perks”, along with dozens of Vice-Presidents. Why on Earth were we paying $6,000/month on average for Darren to commute weekly to Overland Park from his home in southern Tennessee?? Insane!! Wasn’t his multi-million dollar compensation package enough for him to buy his own damned plane ticket? You’re running a Kansas company, move to Kansas!
When the lenders forced Yellow to merge operations with Roadway in 2009, they used Roadway’s archaic and ancient computer platform. That alone caused complete chaos, as part of what was likely the biggest debacle in the history of American business.
Finally, some of the employees didn’t take this job seriously. We had slackers, vandals and equipment wreckers. How many?? I don’t know; I worked my buns off!