YRC Worldwide Inc. has shrunk its corporate headquarters staff from around 2,000 to less than 400 as the company tries to streamline its operations.
CEO James Welch told analysts at the Deutsche Bank 2012 Aviation and Transportation Conference on Thursday that most of the holding company's employees are in accounts receivable after he shifted sales, information technology and other back-office responsibilities to YRC’s subsidiaries.
"The holding company is very skinny compared to what it used to be," Welch said. "We kind of have a joke around Overland Park that we just want to be squatters on the 10th floor and an insignificant part of that building and put the energies, the resources, toward the operating companies."
The overall number of employees working for YRC Freight, the company's national long-haul subsidiary that shares space with YRC Worldwide (Nasdaq: YRCW), has increased, absorbing some of the workers from the holding company and from operations shuttered in other states, officials said.
YRC officials also said they are experiencing the same economic slowdown that has led competitors ABF Freight System and FedEx to warn in recent days of disappointing quarterly numbers.
However, they added that their regional carriers are less exposed to the sluggish economy and that they have ways to further cut costs and improve efficiency.
"We fully anticipate that the investments that we're going to make, not only in the handheld devices we're rolling out by the end of the year but also the investments in training, will help us," CFO Jamie Pierson said.
It was YRC's first conference call with analysts since November as Welch, who joined the company after last summer's reorganization, and his staff worked to right a ship almost scuttled amidst the sluggish economy and heavy debt levels.
Welch told the audience that his team's efforts to push more of the day-to-day operation decisions to the subsidiaries has borne fruit with improved customer service and operations.
For example, YRC is making deliveries within company standards 80 percent of the time, compared with 62 percent last year.
That success is allowing the company to increase its rates and try to win back customers who defected to other carriers in recent years.
"You've got to give good service to make this thing work," Welch said.
Pierson acknowledged that YRC Freight recorded a 3.3 percent decline in daily freight tonnage in the second quarter compared with a year ago. But he said that came as the company sought to eliminate less profitable business.
The company's regional businesses — Holland, Reddaway and New Penn — reported a collective 4.4 percent increase in volume during the same period.