Pitney Bowes’ former e-commerce unit is laying off more than 1,200 employees and shuttering six facilities as the segment winds down its business under liquidator Hilco Global .
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The majority of the job cuts will take place in early October, when five of the warehouses will close. The sixth facility, a distribution center in Monroe, N.J., will close Nov. 7, resulting in 413 layoffs. Another 278 job cuts will stem from the closure of a Rockport, Ill. warehouse on Oct. 12. That automated facility only opened in fall 2022 and was designed to sort up to 24,000 parcels per hour for the U.S. Postal Service (USPS).
Four more warehouses are shuttering in October, including those in Bloomington, Calif. (236 layoffs); Canal Winchester, Ohio (165 layoffs); Stockton, Calif (112 layoffs); and Odenton, Md. (50 layoffs).
One Worker Adjustment and Retraining Notification (WARN) Act notice for the Ohio facility gave insight into the type of employees that were let go in the facility closures. Fifty-eight of the workers were package handlers, while 17 are forklift operators and another 19 are drivers.
In an August earnings call, Pitney Bowes interim CEO Lance Rosenzweig thanked Global Ecommerce (GEC) employees, saying the exit of the segment was “in no way reflective of their performance.” Pitney is providing severance payments and outplacement services to impacted members to help ease their transition.
According to a Monday court filing, the former Pitney Bowes unit now known as DRF Logistics now operates 12 domestic parcel sortation centers and two third-party facilities. Of the domestic parcel centers, two out of Chicago and Hebron, Ky. are no longer operating, DRF said.
Prior to Pitney’s sale of the logistics services unit in August, these facilities enabled the company to pick up parcels from their retail customers’ distribution centers and move them through its physical network. Apparel giants including Abercrombie & Fitch , Shein and Victoria’s Secret, leveraged GEC to assist with their logistics operations.
The company stopped accepting new packages on Aug. 17, and ceased picking up returns from the USPS network through Sept. 5.
The GEC sale came after a months-long board review of the segment, which had seen an annual decline in earnings before interest and taxes (EBIT) since 2015. Despite seeing losses every year, Pitney Bowes had invested over $1.1 billion throughout that period to support the struggling unit, according to the court filing. Between 2017 and 2023, GEC incurred a combined $536 million in EBIT losses.
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The segment was a major point of contention for multiple activist investors last year, resulting in a board battle in the summer and later on, the departure of CEO Marc Lautenbach .
In selling GEC in August, Pitney Bowes eliminated “substantially all of the losses” associated with the unit, effectively canceling out approximately $136 million in losses for the year ended Dec. 31, 2023.
As is sought to recoup some savings before offloading the GEC business, Pitney Bowes also sold off the fulfillment portion of its business, alongside a Kentucky warehouse, to fulfillment services and commerce enablement technology Stord .
The court filing indicated that the sale was just $1.5 million, including the warehouse lease. That month, Pitney also sold off 63 robots and chargers to healthcare company Medline for $500,000.
Under DRF Logistics, the former GEC business has a network of owned and third-party managed trucks that served to connect the Pitney-affiliated domestic facilities and interchange parcels among them. These trucks moved parcels from facilities to individual post offices and larger post office facilities around the country for the USPS.
DRF could sell off parts of its fleet of trucks, trailers and other spare materials. While the court filing lists the inventory’s book value at $8.3 million, expected recovery would be around 5 percent in a Chapter 7 sale, or roughly $416,000, if a sale wasn’t made before Nov. 15.
DRF currently has $4.9 million in cash. However, GEC’s top unsecured creditors are still seeking more than $24.7 million total in payment. Priority Express Courier has a $2.3 million claim, the highest amount across the board. XPO says it is owed $1.7 million, while UPS claims nearly $1.57 million.
Pitney Bowes is still looking to simplify the e-commerce experience for customers despite the GEC divestment. The shipping and mailing company has launched ShipAccel, a software solution designed to help SMBs negotiate discounted shipping rates, provide real-time tracking information and email updates to consumers, and reduce order processing times.
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