The logistics industry cuts a large number of workers

The "crazy" recruitment in logistics due to the Covid-19 pandemic is cooling off. Warehouse operators, truckers, and freight businesses say they are cutting payrolls as supply chain disruptions lead to tens of thousands of new jobs. Some argue that the layoffs may be because companies are cutting personnel costs.

Bob Biesterfeld, CEO of CH Robinson Worldwide Inc., the largest freight broker in the United States, said: “We were ahead, leading in terms of headcount, but we didn't expect the market to go down. so fast. As the supply chain got easier, we had to make some tough decisions about staffing to keep costs down.” According to the US Bureau of Labor Statistics' preliminary monthly employment report, logistics companies added more than 400,000 jobs from the beginning of 2020 to the end of 2021 but decreased by 20,000 jobs from September to October.

An Amazon logistics center in North Carolina. The US freezes hiring in retail and businesses.

This is the fourth consecutive payroll cut and the largest since the sector lost 75,000 jobs in April 2020 due to social distancing measures. "We've had over two years of tremendous growth in commodity demand and supply chain. Companies must scale as best they can by hiring people to meet growing demand. Now, things are normalizing and operating easier so there are no more workers needed," said Cathy Roberson, president of research and consulting firm Logistics Trends & Insights LLC.

The warehousing and shipping sector has shed nearly 50,000 jobs since June, according to BLS data. Demand for warehouse workers has fallen as consumers shift from spending on goods to services, said Nick Bunker, North America economic research director at Indeed.com. "This is part of a big shift in the economy, with consequences for the transport and logistics industry because these are the areas that transport goods to businesses, the end consumer," he said. Bunker said.

Meanwhile, Amazon Inc., which doubled the size of its network during the two years of the pandemic, is scaling back its plans to expand its warehouse this year. In particular, last month, the company froze hiring in the retail division. The e-commerce giant said it would suspend hiring for the next several months, amid signs of a widespread economic slowdown.