Investing.com -- Shares in XPO Logistics Inc (N:XPO) surged more than 8% in after-hours trading after one of the world's largest supply chain services providers of freight transportation announced the elimination of 190 positions on Friday in a broad cost-cutting move.
XPO Logistics, a Greenwich, Connecticut-based logistic services company with operations in more than 25 countries, said the decision was aimed at eliminating redundancies following its $3 billion merger with Michigan-based freight transportation company CNW in September. The acquisition helped create the second-largest Less-Than-Truckload (LTL) provider and top company in Western Europe.
Of the 190 positions being eliminated, according to XPO, nearly 85% were of the non-sales variety, mostly consisting of administrative, management and back office capacities. The eliminations impact less than 1% of XPO Logistics LTL workforce in North America, the company said in a statement.
"Our plan for LTL is very much on track for our near-term and long-term goals. The integration of Con-way has given us the opportunity to engineer a leaner, more results-oriented LTL operation while improving on our industry-leading customer service levels. We plan to double the number of strategic account managers over the next few months," XPO Logistics president Tony Brooks said in a statement. "Our focus is on growing LTL by expanding our service capabilities and cross-selling LTL to XPO's full customer base."
The company expects to save $20 million in expenses and boost operating profit by $170 million over a two-year period as a result of the actions.
"Our new organizational structure is based on clearly delineated P&L responsibilities and customer service accountability at the field level," Brooks added. "We're also optimizing our footprint to increase the efficient use of our capacity, improve transit times in key lanes and make our entire network more productive."
Shares in XPO Logistics soared 1.74 or 8.24% to 22.85 in after-hours.