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In the pandemic era, disruptions to the global movement of materials and goods have become pervasive. Connecticut’s largest companies are not immune to the interruptions.
But the supply-chain pressures are not affecting them in the same way. While some companies have seen revenues and profits surge in recent months, others have grappled with lower returns and losses. At the same time, at least one of the big businesses headquartered in the state has responded by making layoffs — but many are still hiring.
“In order to grow the top line, we’re going to invest in more trucks, we’re going to invest in more (facility) doors, we’re going to invest in more people,” Bradley Jacobs, CEO and chairman of Greenwich-based XPO Logistics, one of the world’s largest transcompany, porters of goods, said on an earnings call Wednesday.
Mixed results
Ranking No. 190 on last year’s Fortune list of the companies with the highest revenues, XPO saw its returns last year rise about 25 percent to nearly $13 billion. Its fourthquarter 2021 revenues increased 14 percent year over year.
For 2021, XPO recorded a profit of $336 million, about three times the total for 2020.
“We have a ton of momentum in LTL (less-than-truckload shipping), and the year’s off to a very good start,” Jacobs said. “Our action plan is working.”
At the same time, XPO’s North American truck-brokerage business is “continuing to far outpace industry growth,” according to Jacobs.
Last year, XPO spun off its logistics business into an independent GXO Logistics. The latter is also headquartered in Greenwich, with its main offices at 2 American Lane. XPO’s headquarters is at 5 American Lane.
Norwalk-based informationtechnology provider Xerox Holdings, No. 415 on the Fortune list, has faced more headwinds in the past few months. Compared with
2020, its revenues in 2021 were essentially flat at about $7 billion. Its fourth-quarter revenues declined 8 percent year over year.
For 2021, it sustained a $455 million loss. The bottom line reflected a $781 million “goodwill impairment” accounting charge.
“In the second half of the year, we experienced an unprecedented level of supply-chain disruption with conditions deteriorating throughout the final two quarters of the year,” Xerox CEO John Visentin said on a Jan. 25 earnings call. “These disruptions resulted in revenue falling below expectations we laid out at the beginning of the year, with most of the shortfall comprised of high-margin, mid-range devices and post-sale revenue.”
Visentin said “supply-chain disruptions also drove an increase to our backlog of equipment and
IT hardware to nearly $350 million, which is approximately 2.5 times higher than at the end of 2020.”
Stamford-based shipping-andmailing firm Pitney Bowes, No. 664 on the Fortune list, saw its annual revenues grow 3 percent to nearly $4 billion. But its fourthquarter returns slipped 4 percent. The revenue decline in the past quarter reflected unexpectedly low demand in global e-commerce.
The company reported a loss of about $1 million for last year.
“We built our capacity plan against the volume we anticipated,” Pitney Bowes CEO and President Marc Lautenbach said on a Feb. 1 earnings call. “And in fact, we probably overbuilt our capacity a touch against the planned volume because we're determined to deliver successfully for our clients.”
Lautenbach added that, “simply said, we never got the volume we expected. It’s been well-reported that consumers responded to the blend of supply-chains issues, plus COVID, plus the holidays, with new ways to buy that provide certainty of delivery.”
Some layoffs, but still many new hires
Some companies have responded to the supply-chain pressures by cutting jobs.
New Britain-headquartered tool-and-equipment maker Stanley Black & Decker has confirmed that it is making some layoffs. Last week, the company reported 2021 revenues of nearly $16 billion, up 20 percent from 2020, and an annual profit of approximately $1.7 billion, up 37 percent from 2020.
“The company is taking steps to align its cost structure with the current environment, specifically inflation and supply chain,” Stanley Black & Decker said in a statement. “This unfortunately has resulted in a small percentage of employees being let go from the company, primarily salaried employees with limited impact to our manufacturing and distribution center operations as demand for our products has been high.”
Stanley Black & Decker, the No. 209 company on the Fortune list, declined to specify the number or locations of the layoffs. The company employs more than 60,000 worldwide, including about 2,000 in Connecticut.
Despite the layoffs, Stanley Black & Decker is still hiring. Its website lists about 50 openings for Connecticut-based positions.
In response to an inquiry from Hearst Connecticut Media about whether the company had contacted her about any layoffs in its hometown, New Britain Mayor Erin Stewart said in an email Wednesday that “I have had no contact from Stanley Black & Decker.”
The supply-chain headwinds are not stopping other companies from hiring either.
XPO, which employs about 200 in Connecticut, has about 40 openings in its home state. The openings include driving positions.
Last year, XPO graduated approximately 900 professional drivers from its driver-training schools. In 2022, it aims to double last year’s number of graduates.
Pitney Bowes and Xerox each have about 40 openings for Connecticut-based jobs, according to their websites.
“Our employee population remains at a steady state, even slightly increasing,” Pitney Bowes, which employs about 1,000 in Connecticut, said in a statement. “We continue to hire in the targeted growth areas of our business.”
Xerox, which employs about 330 in Connecticut, said in a statement that “we are always assessing the needs of the business, which change as the company expands into new areas, such as IT services, augmented reality and 3D printing. We will evolve our workforce as needed to ensure we have the talent in place to help us execute our strategy.”