Knight-Swift lays off employees after expressing market weakness
Knight-Swift Transportation, one of the largest trucking companies in the United States, is facing a tumultuous period marked by disappointing financial results and a bleak outlook for the year ahead.
As a response to these challenges, this week the company has conducted a series of layoffs affecting an undisclosed number of employees at the company, according to various sources.
These developments come on the heels of a second-quarter earnings miss and lowered full-year earnings guidance, which has prompted the company to take cost-cutting measures.
A source close to the company said the layoffs are set to be completed by the end of this week. Laid-off employees came from support departments including human resources, information technology (IT) and other ancillary support roles. IT roles affected included business analysts, scrum masters, quality analysts, product managers and project managers.
Another source within the organization that was affected by the layoffs indicated that roles directly related to the company’s core business functions, such as drivers, driver managers, customer managers and customer-facing roles, were not impacted by the layoffs. Some in the affected departments were even offered roles back into their previous work in core business functions.
FreightWaves reached out to Knight-Swift (NYSE: KNX), but a company spokesperson declined to comment on the story.
Cost-cutting initiatives
These layoffs come in the wake of a challenging second quarter for Knight-Swift Transportation, which resulted in the company missing its Q2 earnings expectations and revising its full-year earnings-per-share guidance downward by 36%. A series of factors have contributed to this downturn, including anticipated weakness in truckload and intermodal rates, lower gains on equipment sales, and losses associated with the recently acquired carrier U.S. Xpress.
To address these financial challenges, the company’s top executives, including CEO David Jackson and CFO Adam Miller, have recently voluntarily reduced their base salaries by 20% for the remainder of the year. This move is part of broader cost-cutting initiatives aimed at improving the company’s financial position.
Despite these temporary salary reductions, the executives received substantial compensation in the past year, totaling more than $11 million, including stock awards and other compensation.
Knight-Swift is focusing on diligent cost controls as it positions itself for future recovery. The layoffs, primarily in support departments, underscore the company’s efforts to streamline operations and reduce costs.
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