ELD Provider Lays Off 349 Workers Citing Plummeting CMV Activity Due to COVID-19
San Francisco, CA – A major provider of electronic logging devices (ELDs) laid off almost 20 percent of its workforce on Tuesday citing a dramatic reduction in vehicle activity among its 65,000 customers amid the COVID-19 pandemic.
In a letter sent to employees, Shoaib Makani, CEO of KeepTruckin (KT), said the company had made the “difficult decision” to lay off 349 employees which accounts for 18 percent of its 1,900 global workers.
“I have a duty to make sure KT can weather any storm,” he wrote. “We are in the midst of the worst we have seen in our lifetimes.”
According to Makani, KT’s internal data compiled in the last two weeks shows a 10 percent reduction in vehicle activity in its network of customers, with the hardest-hit regions declining by more than 20 percent.
“If this pandemic spreads across North America, we are facing an extended quarantine that will inevitably increase churn, lower rates of new customer acquisition, and cause out total annual recurring revenue to contract,” he said.
Further, Makani warned things could soon become even more dire especially for small trucking companies which comprise approximately half of KT’s customer base.
“It is impossible to predict the full impact of COVID-19 on the global economy and how that will flow through our customers, but it is clear that economic output in North America is contracting rapidly,” he explained.
In addition to announcing the layoffs, Makani also outlined numerous other steps the company was taking to ensure its survival.
For starters, Makani said he would not be taking a salary during the pandemic.
Co-founders, Ryan Johns and Obaid Khan, will see their compensation cut by 50 percent also.
Workers whose annual compensation is greater than $50,000 will have their pay cut by 10 percent, and no one will receive 2019 company bonuses.
“I know this likely brings little comfort, but it is important that you all know that we did everything we could to avoid this outcome,” he commented.
Hope for an economic bounce back in the near term was largely dashed last weekend as President Trump extended COVID-19 mitigation guidelines through April 30, and governors of a still growing list of states continue to order non-essential businesses to close and people to stay home.
Despite three historic phases of rescue relief legislation being passed by the U.S. Congress to this point, economic anxiety continues to grow.
The U.S. experienced massive unemployment claims last week topping more than 3 million.
Most economists are expecting that number to be similar this week as well.
Photo courtesy KeepTruckin