Layoffs at GXO, Coyote, Flexe Usher in 2024
Logistics is ringing in the new year with layoffs, carrying over from a 2023 that saw job cuts across major industry players.
Contract logistics provider GXO is closing up shop at a distribution center in Memphis, Tenn., with the company laying off 211 employees starting March 6, according to a Worker Adjustment and Retraining Notification (WARN) notice shared by the Tennessee Department of Labor and Workforce Development.
More from Sourcing Journal
Layoffs at Fanatics, Locus Robotics Reflect New Warehouse Realities
Massive Fire at Russian E-Commerce Warehouse Raises Questions
All layoffs will be complete by April 27.
The 648,000-square-foot Memphis warehouse served as a distribution center for Disney, but that partnership is ending.
“We’re ending operations with one of our customers in the Memphis, Tenn. area,” a GXO spokesperson said. “As a result, impacted employees will have the opportunity to apply for open roles and transfer to nearby GXO sites that serve other customers.”
The warehouse is currently being marketed by CBRE as available for occupancy in February 2024, with a lease expiration date of August 2025.
The employees at the facility are not represented by a collective bargaining agreement, the WARN notice said, and therefore are not unionized.
GXO, which was spun off from less-than-truckload (LTL) company XPO in 2021, has shuttered distribution centers across Texas and Maryland over the past year after losing customers.
But the individual closures and layoffs don’t make much of a dent in the company’s overall scale. The outsourced warehousing provider still employs more than 130,000 staff across 27 countries, and operates more than 970 warehouses totaling approximately 200 million square feet.
Another logistics company, Coyote Logistics, also had a round of layoffs in what would be the fifth set of job cuts at the freight brokerage since the start of 2023. The Chicago-based company has eliminated an unspecified number of jobs in its sales and operations divisions.
“We’re aligning our sales and operations structures with the needs of our business. Unfortunately, we had to make the difficult decision to eliminate some positions,” said a Coyote Logistics spokesperson.
Coyote declined to disclose the number of employees affected or the percentage of the company’s workforce that was part of the headcount reduction.
The spokesperson said the company is taking the steps to minimize the number of employees impacted by the layoffs.
“We are providing comprehensive severance and outplacement services to support those impacted,” the spokesperson said. “These changes are difficult but necessary to ensure our workforce and corporate structures support our business needs as they evolve.”
In December, the UPS subsidiary offered voluntary separation agreements to a number of senior managers and directors—then the fourth round of layoffs for the firm in 2023.
Coyote’s series of layoffs have been a common theme for freight brokerages during the ongoing freight recession, whether it be at now-defunct Convoy, Flexport, Uber Freight, Freightos or Flock Freight. They are a byproduct of the overall dips in freight demand, which caused the industry to experience substantial revenue declines that crushed margins.
Earlier this month, warehousing-as-a-service platform Flexe kicked off the year with 99 job cuts, revealed by a WARN notice in Washington State.
Flexe CEO Karl Siebrecht confirmed that the layoffs resulted in a 38 percent cut of its workforce, coming just four months after the warehousing technology firm laid off 33 percent of staff at the time.
The job cuts come a year and a half after the Walmart and Ralph Lauren partner raised a $119 million Series D funding round valuing the company at $1 billion. Given the company’s former valuation, the layoffs signal how quickly venture capital funding dried up for supply chain technologies in a high-interest rate environment.
Additionally, the layoffs aligned with that of the larger transportation and warehousing industry, which endured 23,000 jobs losses in December, according to data from the U.S. Bureau of Labor Statistics (BLS). Overall, the sector is down 100,000 jobs since it peaked in October 2022, canceling out the warehousing employment gains made during the Covid-19 pandemic when new storage space was in high demand.
Another warehouse technology company felt the heat of a tough 2023, with Memphis-based Dextrous Robotics shutting down after just four years in operation.
In a LinkedIn post, Dextrous Robotics CEO Evan Drumwright, didn’t mince words: “We adopted an aggressive trajectory 18 months ago that the recent investment market didn’t support. We became insolvent as a result.”
Dextrous Robotics developed a “chopstick” method approach to truck unloading, wherein a pair of vertically positioned girders control a pair of sticks that press up against the boxes to lift them. The sticks’ dexterity allows the system to approach boxes from multiple vantage points and angles.
The company raised $8 million throughout its operation.
