Tuesday, March 02, 2010

YRC makes further job cuts

U.S. trucker YRC Worldwide has slashed its workforce further, cutting into its already-thinned ranks as it tries to appease lenders and debt-holders as part of a broad financial restructuring.

The trucking company refused comment. Sources within the company said the No. 1 less-than-truckload carrier laid off at least 200 people in February from its Overland Park headquarters location and a campus in Akron, Ohio.

The layoffs include 90 people, or about 25 percent, in YRC's information technology division, the sources said.

Analysts have expressed concern that YRC's job cuts, coupled with voluntary departures by employees looking for more stable employment elsewhere, might leave the YRC talent pool too shallow.

"It is a concern," said Dahlman Rose analyst Jason Seidl. "You hope they can maintain enough of a talent pool so they can forward."

YRC has fired more than 4,500 employees over the last year as it struggled to stay out of bankruptcy and hold onto customers.

YRC said last month it was regaining its financial footing and was moving forward on a $70 million private placement of unsecured notes that follows a $470 million debt-for-equity swap that was key to keeping lines of credit open with lenders in December.

YRC Chairman Bill Zollars said in February that customers were returning to YRC due to the company's improved financial stability, and the bulk of the employee cuts were over.

On February 23, YRC completed the sale of $49.8 million of its 6 percent convertible senior notes due 2014. YRC has been working to restructure for more than a year.

In a February 25 note to investors, Morgan Keegan analyst Art Hatfield said he saw YRC continuing to struggle.

"We believe YRCW will continue to struggle as tonnage levels are not substantially improving and the company continues to burn through cash," Hatfield's note said.

At mid-morning on Monday, YRC shares were off nearly 5 percent at 44 cents.

1 comment:

Anonymous said...

As a former YRC sales rep in Albuquerque I can say this comapny is sinking fast. The have no regard for anyone. Worst career move I ever made getting into that industry. Thanks for the memories and thanks for nothing

William Harrison