Yellow Lays Off a Large Swath of its Workforce, Winds Down Operations

Trucking company Yellow on Friday laid off a large number of workers and is shutting down regular operations, according to people familiar with the actions, as the company copes with a liquidity crisis and weighs options including an imminent bankruptcy filing. 

The dismissals included members of the company’s sales force, business operations and technology department, the people said. Yellow’s unionized drivers and freight handlers weren’t part of the layoffs, they said. 

The company, one of the country’s largest trucking companies with more than $5.2 billion in revenue last year, is keeping its customer service workers in place, according to one of the people, because the trucker still has freight in its network that it is trying to get to destinations or back to customers. 

Yellow said in a notice to employees that was obtained by The Wall Street Journal that it “is shutting down its regular operations on July 28, 2023, closing and/or laying off employees at all of its locations.”

The actions came as Yellow has been locked in a battle with the International Brotherhood of Teamsters over missed pension and benefits payments and new contract terms. The showdown, including a strike threat over the pension-fund payment, accelerated a financial tailspin at a business already facing a heavy debt load and dimming demand in a weak freight market. 

The Wall Street Journal reported Yellow was preparing to file for bankruptcy, heightening the threat that the 99-year-old trucker would shut down.

Freight industry executives and equities analysts say the major customers, including retailers, manufacturers and freight brokers, started withdrawing business from the company last week. Facing a deepening cash drain, Yellow has stopped taking new shipments into its network. 

“It appears to us they are winding down operations,” Jack Atkins, an equity analyst at Stephens, said on Thursday. “They are pulling in trailers and not accepting freight.”

Teamsters officials sent a letter to union locals this week saying that hope for the carrier was “fading.” 

“Unfortunately, despite more than a decade of concessions totaling billions of dollars given to the Company by Teamster members as well as a massive government bailout loan in 2020, Yellow may finally be succumbing to its enormous debt burden,” the notice said. 

Executives across several companies say they have seen a surge in their freight volumes in recent days as Yellow’s problems have mounted. 

Fort Smith, Ark.-based ArcBest, parent of Yellow rival ABF Freight, said its shipment count jumped more than 10% in the past week, largely because of business diverted from Yellow’s network. “It is evolving daily, what we are experiencing,” ArcBest Chief Executive Judy McReynolds

“We can handle that good business and make sure it is working well within the network,” she said, adding, “That is a great opportunity for us.”

“There’s no doubt everybody has been hurting for business, so I believe there is ample capacity,” said Paul Svindland, CEO of STG Logistics, a Bensenville, Ill.-based carrier.  

Yellow is the third-largest carrier in the trucking segment known as less-than-truckload, in which operators carry goods for multiple customers on the same trailer. 

Write to Paul Page at [email protected]