Flexport is laying off 20% of its workforce one month after the logistics startup ousted its CEO, Dave Clark
Logistics startup Flexport is planning to cut about 20% of its global workforce in a new round of layoffs following a 20% layoff in January, CNBC reported.
Citing an internal memo to the company’s employees, CNBC said that CEO Ryan Petersen plans to send notifications regarding job status to employees whether they’re impacted or not via email starting Friday morning, CNBC said, citing a copy of the memo viewed by the media outlet.
“Today I have a difficult decision to share: We will reduce the size of our global team by approximately 20% with the process starting tomorrow, Friday, October 13,” Petersen wrote.
These layoffs come amid ongoing upheaval at the company since Petersen’s return as CEO last month, following the abrupt removal of the former CEO, Dave Clark. Petersen has repeatedly asserted that Clark, an Amazon veteran of 23 years, overspent and overhired during his tenure at Flexport. However, documents examined by CNBC and sources close to Clark suggest that Petersen and members of Flexport’s board played a role in implementing decisions the company now deems ill-advised.
Meanwhile, a Flexport spokesperson directed CNBC to a blog post by CEO Ryan Petersen, which confirmed the impending layoffs. However, the spokesperson did not disclose the company’s exact headcount. According to Pitchbook data, Flexport had around 3,500 employees as of late September.
Since reassuming the CEO role, Petersen swiftly made significant changes at the company, including the removal of several of Clark’s key hires, the CFO, and the HR chief. He also canceled 55 job offers and initiated plans to lease out unoccupied office space across the country.
In his blog post, Petersen expressed his belief that following these cuts, Flexport will be well-positioned to capitalize on opportunities and return to profitability by the end of the next year. He emphasized that these changes will not adversely affect the customer experience, with the company concentrating on service quality, such as quote-to-invoice accuracy and shipment milestone accuracy.
Flexport will be “in a great position to take advantage of the opportunities in front of us to return to profitability as soon as the end of next year.” The move will “not impact the customer experience,” Petersen added.
“Today is a tough day, but we are a resilient, purpose-driven team that will overcome this setback and deliver on the promise of our mission of making global commerce so easy that there will be more of it,” he said.
Founded in 2013 by Ryan Petersen, Flexport is a full-service global freight forwarder and logistics platform using modern software to fix the user experience in global trade. Flexport enables buyers, sellers, and their logistics partners to ship, store, and trade goods.
In May 2022, Flexport raised $1 billion in funding led by SoftBank to deepen its technology and data capabilities, grow its global logistics infrastructure footprint, and invest in industry expertise to help clients navigate an increasingly complex global trade environment. Back then, the startup operated its own 747 aircraft and employed 1,066 people across 11 offices and four warehouses.
Flexport uniquely delivers a combination of advanced technology, physical logistics infrastructure, and human expertise, providing fast and predictable transit times, visibility and control, and lower supply chain costs to logistics and supply chain professionals across the globe.
First to market with purpose-built cloud software and data analytics platform, Flexport today connects almost 10,000 clients and suppliers across more than 200 countries, including established global brands like Georgia-Pacific as well as emerging innovators like Sonos. Flexport offers a full range of services, including ocean, air, truck, and rail freight, drayage and cartage, warehousing, customs and trade advisory, financing, and insurance.