Trucking giant CH Robinson furloughs 7% of North American workers
The company employs 15,474 workers worldwide
FOX Business' Jeff Flock says there was already a truck driver shortage before coronavirus hit and the pandemic has made that shortage even worse.
Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.
C.H. Robinson Worldwide Inc. unveiled plans on Wednesday to furlough and reduce hours for 7 percent of its workforce as the company works to soften the impact of declining shipments due to the COVID-19 pandemic.
The Eden Prairie, Minnesota-based trucking giant said the furloughs will be 90 days in duration and take place in the U.S. and Canada. Those of the 15,474 global employees affected will have their medical insurance and other benefits covered during their absence.
"The direction of the freight market and of the broader global economy will be very difficult to predict over the next few quarters," CEO Robert Beisterfeld told investors.
Still, he added, "we are committed to our vital role in the global supply chain by delivering critical and essential goods and services, especially in this time of crisis. We'll continue to make measured and thoughtful decisions that are in the best interest of our employees, customers, contract carriers and the long-term health of the company."
Previous actions taken by C.H. Robinson to mitigate the financial strains caused by COVID-19 include reducing Biesterfeld’s salary by 50 percent, cutting cash retainers for board members by 50 percent, reducing executive salaries by 20 percent, extending freezes on hiring and non-essential travel and temporarily suspending 401(k) retirement plan matching.
C.H. Robinson’s cash flow from operations plunged 77 percent in the first quarter to $58.5 million. The company had $294.6 million cash and cash equivalents on March 31, down 34 percent from the end of 2019. First-quarter profit fell 52 percent year-over-year to $78.15 million.
C.H. Robinson will “continue to monitor the impact of COVID-19 and may adjust its action plans accordingly,” a spokesperson said in a statement.
CLICK HERE TO READ MORE ON FOX BUSINESS
Shares fell 5.4 percent this year through Tuesday, outperforming the S&P 500’s 11 percent drop.