Employees at Yellow Logistics confirmed to FreightWaves they were terminated Tuesday as part of widespread layoffs at the independent subsidiary of Yellow Corp. But whether this was tied to an actual shutdown of the 3PL was not clear Tuesday night.
One employee said all staff were given short notice to dial into a company-wide conference call. On the call, employees were told there was no more money to fund the operation and they were being terminated.
In recent days, parent company Yellow (NASDAQ: YELL) had said “it’s business as usual” at the business formerly known as HNRY Logistics. Yellow announced last week it was shopping the unit that specializes in truckload shipments, contract logistics and warehousing and distribution services, presumably trying to offload it ahead of a bankruptcy filing.
Another employee said the entire unit, roughly 100 to 150 people including managers, were let go Tuesday.
Yellow hasn’t commented since leadership at the Teamsters union said late Sunday night it was notified the company was filing for bankruptcy. Just hours prior to that announcement, Yellow closed the gates at its terminals and posted signs saying all company operations had ceased.
Most of its nonunion workforce had been let go Friday.
The company had been losing customers for weeks as speculation of a potential shutdown grew. In a public back-and-forth with union leadership over operational changes the less-than-truckload carrier said it could be out of money as soon as July.
Attempting to preserve cash, it missed required contribution payments to health care and pension funds on July 15, prompting members of operating companies Holland and YRC Freight to issue a strike notice. The planned work stoppage would ultimately be called off at the last minute when the fund it contributes to extended health insurance for those employees. However, the damage was done as the threat of a shutdown hastened the rate at which intermediaries and customers diverted freight from its network.
Yellow was reported Tuesday to be close to a deal to receive debtor-in-possession financing from one of its current lenders, Apollo Global Management (NYSE: APO). The infusion would place the investment firm atop others in a liquidation scenario, a process that would attempt to satisfy the company’s $1.5 billion in outstanding debt.
Yellow did not respond to a request for comment.