Urethane Blog
Big Layoffs at C.H. Robinson
July 2, 2024
C.H. Robinson slashes over 50% of US sales team, sources say
Brokerage disputes number of workers recently laid off
· Monday, July 01, 2024
Truck brokerage giant C.H. Robinson Worldwide laid off around 80 members of its remaining 150 sales representatives in the U.S. on Thursday, according to sources familiar with the cuts.
The source said the sales division of the publicly traded brokerage has slashed U.S. sales jobs by around 89% over the past six years as it turned its focus from its people to embracing technology.
“We once had about 650 sales reps in the U.S. divisions, but that number dropped as C.H. Robinson’s focus switched from training and retaining talented people to its focus on technology,” the source, who asked to remain anonymous for fear of retaliation, told FreightWaves.
He estimates the current number of C.H. Robinson’s sales reps, whose jobs are solely to sell the brokerage’s services, as around 70 nationwide after Thursday’s job cuts. He clarified that some legacy brokerages count business development and account management positions that may overlap with the sales division as part of their total sales headcount. C.H. Robinson doesn’t.
In a statement, a spokesperson for Eden, Minnesota-based C.H. Robinson (NASDAQ: CHRW) disputed the number of sales representatives affected by the recent cuts but declined to provide a breakdown of the number of sales positions C.H. Robinson eliminated in the U.S. last week.
While the source said he was only aware of the job cuts in the U.S., a company spokesperson said C.H. Robinson doesn’t break down the number of laid off workers by country as the brokerage also has offices in Canada and Mexico.
In a statement provided to FreightWaves, the company said that “less than 2% of NAST [North American Surface Transportation] roles were impacted in June as a part of a restructuring to ignite growth and provide greater opportunity for our sales employees.”
“We are getting fit, fast and focused as a part of our enterprise strategy and new operating model geared at delivering exceptional and high-value service to customers and carriers,” the company said.
Despite rumors that major changes were coming to the largest freight brokerage, the source said few expected that more than half of the U.S. sales group would be gutted.
“You can’t cut your sales team, which is the heart of your organization, and think that’s going to get you better results in the long run,” the source told FreightWaves. “I think if the leadership knew what these salespeople brought to the table and how hard it is to train a salesperson, I think they would regret what they did Thursday, because it’s going to take C.H. Robinson a decade to recover from this decision.”
Another source, who asked to remain anonymous for fear of retaliation, formerly worked at C.H. Robinson. He said most of the sales reps who were let go worked with the brokerage’s smaller accounts but that management told them they weren’t being terminated for performance issues as most were meeting or exceeding sales goals.
“It’s just sad that C.H. Robinson is prioritizing technology over people,” the source told FreightWaves.
Tech takes center stage?
A C.H. Robinson employee said the brokerage used to value and invest in its people over technology until Bob Biesterfeld, the former president and CEO of the freight brokerage, announced the company was investing $1 billion in technology in 2019 in an effort to protect its market share. FreightWaves reported that Biesterfield stepped down from his executive position and resigned from C.H. Robinson’s Board in early January 2023.
On Feb. 3, 2022, FreightWaves reported that C.H. Robinson delayed the launch of Project Infinity a day before its Q4 2021 earnings report because of ongoing computer glitches as it tested updates to its Navisphere platform that forced carriers to book freight online instead of dealing with their long-term carrier representatives.
Since 2022, the company has slashed more than 2,400 employees across all its divisions worldwide, according to C.H. Robinson’s quarterly earnings reports. As of March 31, the company had nearly 15,000 employees, down from nearly 17,400 employees it had two years earlier.
Read related article: C.H. Robinson lays off 300 employees
More about layoffs
An employee, who did not want to be named for fear of retaliation, said C.H. Robinson management individually called several members from a sales team Thursday, informing them they no longer had positions with the brokerage.
The source said some had worked for the company for more than 15 years and were considered top performers among their group. He said he heard that some may have been offered different roles, including business development jobs within the brokerage, but didn’t know how many. The source acknowledged that some in the group had been struggling lately with meeting their goals because of the tight freight environment.
Read related article here: Over the past decade, C.H. Robinson lost its moat to innovation and competition
However, C.H. Robinson said it’s still hiring for new sales roles.
“As we continue to adapt to an ever-changing freight market, we are actively hiring for a range of new sales roles, portfolio executives and sales development team members. A winning business model is critical to ensuring growth and opportunities for our employees and the company over the long term,” the brokerage said of its hiring plans.
Following the layoffs, a source said most of the terminated sales reps’ business was divided among the company’s account managers, who also perform dual roles, including some sales functions, but added he worries about their being able to handle the extra workload on top of their own customers when the freight market improves.
“C.H. Robinson gave the freight community a gift when they fired these extremely talented and knowledgeable sales representatives,” the source said. “These good people that know the business will make an impact working for our competitors, for sure.”
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