Forward Air Announces Layoffs Post Omni Acquisition

Forward Air Announces Layoffs Post Omni Acquisition

Forward Air Reduces Workforce Amid Omni Logistics Integration to Cut Costs and Boost Profitability

Forward Air announced last week that it has laid off workers as part of its strategic efforts to reduce costs and accelerate a return to profitability. This decision comes amid the integration of operations following the acquisition of Omni Logistics, which has presented significant challenges. The company spokesperson did not reveal the specific number or types of positions affected.

“We have made the difficult decision to reduce our workforce as part of our previously announced efforts to improve Forward’s financial performance,” the spokesperson stated. “It was necessary to right-size the combined companies and achieve the cost reductions discussed on our first-quarter earnings call.”Since finalizing the merger with Omni Logistics in January, Forward Air has faced numerous challenges. The merger was expected to create a $3.8 billion brokerage and LTL powerhouse with a national warehouse and distribution network.

However, the company’s Q1 year-over-year profits fell by 239%, alongside a $66 million operating loss for the quarter, largely due to severance expenses and operational costs linked to the Omni acquisition.

The layoffs followed the resignation of Forward Air’s previous CEO and CFO in the aftermath of the merger. In April, Chairman, President, and CEO Tom Schmitt was replaced by CVEA Logistics executive Shawn Stewart, and CFO Rebecca Garbrick was replaced on an interim basis by former Yellow Corp. finance chief Jamie Pierson.

Additionally, some shareholders have filed lawsuits seeking to reverse the merger and claim unspecified damages. Despite these challenges, Forward Air remains committed to the merger. During the Q1 earnings call, Garbrick indicated that many of the expenses associated with the Omni Logistics acquisition were expected to be one-time costs, not recurring in the latter half of the year.

Forward Air is also considering divesting other parts of its business. Chief Legal Officer Michael Hance mentioned that the company is developing a plan to sell noncore assets in 2024.

In December, Forward Air sold its final mile business to logistics specialist Hub Group for $262 million.

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