Logistics company Ryder to fire 801 employees in Austin due to “customer’s changing needs”

01/20/2023 / By Arsenio Toledo

American transportation and logistics giant Ryder System Inc, commonly known as Ryder, has announced that it will be laying off 801 employees after the company lost work at a factory in Austin, Texas.

A total of 801 Ryder employees at the Applied Material site, a semiconductor plant in Austin, will lose their jobs. Applied Materials is a California-based company that provides manufacturing equipment, services and software to the semiconductor sector and other related industries.

Ryder formalized the mass layoff on Jan. 11 after it sent a letter informing the Texas Workforce Commission of the change and in compliance with the Worker Adjustment and Retraining Notification (WARN) Act. (Related: FedEx’s freight unit to begin furloughing employees next month due to reduced demand for delivery services.)

The official start date of the mass layoff is set for March 18, and the firings are expected to end by March 31. The company’s WARN Act filing to the commission includes a list of employees that will be laid off, but it does not state what job positions the employees hold. The layoffs are expected to be permanent.

Ryder is a Miami-based transportation and logistics company known nationally for operating a fleet of commercial rental trucks. It specializes in fleet management, supply chain management and transportation management.

Between Ryder’s three business units, it has 39,600 employees, 50,000 customers, and manages 330 warehouses and nearly 250,000 commercial vehicles for its customers.

“Changing business needs” main cause for mass layoff

When media outlets reached Ryder for a comment regarding the mass layoff, the company said that the move was primarily motivated by “a customer’s changing business needs.” The customer in this instance is Applied Materials, which decided in December to expand its own operations in the Austin plant. This includes “insourcing a significant portion of the operations” and relying on two third-party operators for their other logistics needs.

“Ryder employees at these facilities are encouraged to consider any open positions at other Ryder facilities in the area or to apply for positions with the customer or the new service providers,” said Ryder spokeswoman Anne M. Hendricks.

Ryder’s employees at the Austin plant were not represented by a union and do not have bumping rights, which would allow them to displace employees with less time at the company. Ryder noted that it does not anticipate additional layoffs.

Representatives from Applied Materials pledged to hire some positions as part of the insourcing program.

“As part of the planned insourcing of a substantial portion of our Austin logistics operations, Applied Materials will be offering employment positions at the company to many of the people from our former third-party logistics provider,” said the company in a statement. “We look forward to welcoming these workers to the Applied Materials family.”

“Austin has been the home of Applied Materials’ volume-manufacturing operations since 1993, and we intend to continue growing our presence here and strengthening our ability to deliver for customers around the world.”

Applied Materials had roughly 3,300 local employees at last count. The company is expected to expand its operations in other areas of Texas in response to recent supply chain disruptions.

“Although there have been improvements in supply chain performance, Applied Materials expects some shortages to persist into fiscal 2023 and managing these supply chain constraints to increase shipments to customers remains a top priority,” wrote the company in a Securities and Exchange Commission filing.

Meanwhile, the health of Ryder’s continued operations in the Austin area remains uncertain. But the company’s recent earnings report for the third quarter of 2022 appears to show the company in great shape despite the layoffs, with total and operating revenue increasing by 23 percent and 18 percent, respectively.

Learn more about the state of the American economy at MarketCrash.news.

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