Tony Ding/AP Images for XPO Logistics
XPO Logistics.
- XPO Logistics is eliminating its chief operations officer role.
- Kenneth Wagers, who was appointed COO of XPO less than a year ago, will be let go from the company. He previously was a
transportation and logistics executive at Amazon. - It shows just how much XPO Logistics, which became one of America's largest logistics companies via mergers and acquisitions, is changing its growth strategy after a major customer announced it was moving much of its business in-house. This customer is believed to be Amazon.
XPO Logistics just eliminated its chief operations officer role - a job whose main responsibilities was managing mergers and acquisitions for the $15.4 billion logistics giant.
Kenneth Wagers, who was appointed COO of XPO less than a year ago, will be let go from the company. The Securities and Exchange Commissions filing described the decision as a "termination without cause." Wagers was previously Amazon's head of finance for worldwide transportation and logistics.
"We originally hired Kenny Wagers to work alongside our president, Troy Cooper, in anticipation of significant M&A activity," an XPO spokesperson told Business Insider.
"Now that we've decided to do a large stock buyback instead, we're returning to an executive lineup that makes the most commercial sense," he added. "We thank Kenny for his time at XPO and wish him the best."
During XPO's fourth-quarter earnings call last month, XPO CEO Brad Jacobs told investors that XPO's largest customer is curtailing its business with the company by two-thirds. That customer is believed to be Amazon, which depended on XPO for last-mile trucking, warehousing, and other services.
As a result of Amazon's efforts to bring its transportation services in-house, XPO will lose out on $600 million in revenues in 2019.
Jacobs told investors that, because the company's stock has decreased, XPO is focusing on buying back stock. XPO authorized $2.5 billion in stock buybacks over the past several months.
"We have to deal with the reality that is our stock price has come down, our valuation's come down and therefore we should be doing our stock - buy back our stock rather than buying another company," Jacobs said in the Feb. call.
Jacobs quickly grew XPO from a small logistics firm partially through mergers and acquisitions. The Greenwich, Conn.-based company bought and integrated 17 companies from 2011 to 2015, which industry publication FreightWaves recently called "an unprecedented run in the history of the industry."
"While we love M&A, the acquisition that will create the most shareholder value right now is acquiring our stock," Jacobs said. "As you saw in the release, we brought down the numbers for 2019. We can't ignore the fact that our largest customer is curtailing about two-thirds of its business with us."