Logistics firms are responding to the rapidly changing market dynamic as a new supply-demand imbalance, marked by excess inventory levels, hits many retailers amid growing economic uncertainty and fears a recession could lie ahead.
“With the softness in market conditions, we are focusing our efforts and aligning resources in areas that drive maximum value for our customers while addressing their key challenges around operational efficiencies, cost optimization and delivery experience. Keeping this as the priority, we are strengthening our core competencies, deepening our focus on product differentiation, automation and optimizing the effort required to manage operations,” FarEye CEO and co-founder Kushal Nahata said in a statement provided to Sourcing Journal.
That realignment has resulted in a roughly 250-person cut at FarEye, whose software is used to provide assistance in last-mile routing and visibility. The reduction equates to about one-third of the company’s overall workforce, which is over 750 people.
The restructuring hit employees in India, North America and Europe across product and engineering, sales and development among other departments, according to Inc42, which broke the news of the layoffs.
Nahata said the company is focused on offering benefits packages for those impacted by the layoffs in addition to helping them secure positions at other companies.
FarEye last May closed on a $100 million Series E, with plans at that time to pump the capital into expansion in Europe and North America.
“We have made a number of organizational and other operating expense related changes to ensure we are in the strongest financial position possible ahead of the potential for worsening economic conditions,” a company spokesperson said in a statement provided to Sourcing Journal.
The spokesperson declined to say which departments were impacted by the job cuts.
“This decision was not easy, nor taken lightly. With our recent fundraise behind us and the continued intrinsic strength of our business we look forward to continuing to improve the freight industry for the betterment of truck drivers, shippers, the economy and our environment, whatever market conditions we encounter along the way. We will be opening up our networks to support departing staff in their efforts to secure new roles,” the spokesperson said.
Convoy closed on a $160 million Series E along with $100 million in venture-debt investment in April. The latest funding brought its valuation to $3.8 billion.
Convoy said its digital platform connects shippers to a network of some 400,000 trucks.
Industry watchers have noted a turn in the trucking industry. More drivers, coupled with falling consumer demand and high inventory levels, “point to a change in the trajectory of [freight] rates in the coming months,” the Cass Transportation Indexes report for May said.
Tech companies, more broadly, have been quick to react to the changing market conditions with hiring freezes following the more recent run up in hiring in response to demand brought on by the pandemic. Wayfair, Meta, and Uber are among the tech companies that have paused or slowed hiring, while companies such as Twitter have taken back job offers as employers wait to see which way the economy goes.
Other logistics tech companies that have undergone layoffs this year include Stord and Truck It In this month, along with Airlift in May.
Still, digital logistics firms aren’t the only ones scaling back their headcounts.
Neovia Logistics, a third-party logistics provider, notified Pennsylvania state of a planned layoff, effective July 29 at its facility in Tannersville. The layoffs total 98.
A spokesman for the company did not respond to a request for comment Monday on the filing.
Neovia has more than 100 facilities in 20 countries and works with automotive, industrial, aerospace and consumer products companies.
Geodis Logistics, a France-based logistics firm, notified Ohio state of a 302-person layoff at a distribution facility for DSW. The footwear retailer is relocating the facility to the East Coast, according to the filing.
The layoffs are set to be completed by Sept. 30.