Flexport is laying off approximately 20 percent of its global workforce, or roughly 640 employees, in yet another staff purge that has impacted supply chain, retail and technology firms alike.
Ryan Petersen and Dave Clark, co-CEOs of the digital freight forwarder that was once valued at more than $8 billion, informed employees of the layoffs in a companywide memo. It is unclear which departments the job cuts are taking place in.
While the note said that Flexport is “overall in a good position,” the co-chiefs indicated that the company was not immune to the macroeconomic downturn that has impacted businesses around the world.
In particular, Flexport is attributing the layoffs to the company’s reduced volume forecast through 2023.
“Lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, means we are overstaffed in a variety of roles across the company,” the note said.
As part of its goals to simplify global trade, Flexport aimed to move the industry beyond legacy approaches to shipping and customs management via cloud-based operations. As inflation still permeates and climate concerns run rampant, its data platform is built to help businesses analyze and better measure costs, container efficiency and greenhouse gas emissions. The platform is also designed to streamline communication between the various parties involved in the shipping process, and also allows for cargo owners to track their shipments in real time.
Every Flexport employee whose role is being eliminated will be notified by email with information specific to them and their exit. Employees in the U.S., Canada and Europe received their notifications on Wednesday, while staff working in the APAC region would be contacted by local human resource teams on their local time on Thursday.
Support for laid off staff will vary by geography. For U.S. employees, it includes 12 weeks of severance, six months of extended healthcare, a 2022 bonus payment, equity vesting acceleration, immigration support, and ability to opt into the company’s alumni talent directory to help with future job opportunities.
According to the note, Flexport’s co-CEOs say the company is still in the process of doubling its software engineering talent and moving to “single-threaded” business organizations to build its products faster.
“The current slowdown in volume gives us time to focus on building our technology bench while the economy lags,” Petersen and Clark said. “Then, as the economy recovers, we will be ready to be the Flexport that we all want to be—the one stop for customers to make the movement of goods around the world easy. But to do that, we’re going to need to be nimble, fiscally responsible and focused on building fast with operational excellence.”
Petersen has been an oft-outspoken figure in the supply chain throughout the pandemic, gaining notoriety for a Twitter diatribe in October 2021 where he outlined five steps the Biden administration and California Gov. Gavin Newsom needed to take to unclog the congestion in yard spaces within the Ports of Los Angeles and Long Beach.
In the months after, Petersen was interviewed by TV news program “60 Minutes” to talk more about the backlogs he had witnessed on his tours of the West Coast ports, and was the cover story subject of Forbes magazine.
To close 2022, he circled back on the logistics concerns he saw, saying during a presentation, “I’m not convinced that we’ve made any strides to improvement in terms of the underlying infrastructure and the capacity to move cargo.”
Clark, on the other hand, is a relatively new addition to Flexport, having jumped ship from Amazon over the summer to begin his co-CEO role in September. Formerly the CEO of Amazon’s retail operation, Clark was brought in for his heavy background in helping build the massive logistics and transportation network that has defined the e-commerce giant’s dominance in online retail.
When he joined the company, Clark posted on LinkedIn that Flexport was entering an “area where few technology companies have dared to tread because of the vast array of regulatory rules, intimidating geographical distances and siloed network of providers.”
After Clark helms the role for six months, Petersen intends to elevate himself to executive chair.
Earlier this month, the company brought in another former Amazon and Microsoft exec, Teresa Carlson, as president and chief commercial officer. In the role, Carlson will help spearhead expansion into global markets, oversee sales, marketing and communications, and run the company’s philanthropic endeavors.
Flexport is only one of many companies that had hiring surges during the pandemic, only to start trimming their headcount amid signs that the economy was souring. Earlier this month, Amazon and CRM giant Salesforce announced layoffs on the same day, with the former scrapping 18,000 employees and the latter reducing its employment by 7,000—totaling 10 percent of the company. In 2022, tech providers like Bolt, Klarna and Stripe, as well as social media giants like Facebook owner Meta and Twitter, have all levied significant job cuts.
Project44, a supply chain visibility platform that has gets compared to Flexport, laid off 63 employees in July, or 5 percent of its staff. GXO Logistics made announcements about the closing of five U.S. facilities between July and December, axing more than 600 workers in the process.
And that’s before getting into retail layoffs, which have occurred industrywide from everyone from H&M Group to Nordstrom to Allbirds to Shopify, as well as VF Corp., Gap Inc., Bed Bath & Beyond, Stitch Fix, Rent the Runway, Wolverine Worldwide and more.