Buzzy logistics-tech startup NEXT Trucking lays off 70, amid restructuring and trade tensions
- Next Trucking confirmed to Business Insider on Wednesday that it laid off 70 workers on Jan. 17.
- That slashes nearly 20% of the company's headcount, bringing its total employees from 370 to 300.
- Next, which has $134 million to date, is shifting its focus from "least profitable" units to a new pilot program in the Port of New York and New Jersey. Trade tensions have slammed volumes in the West Coast ports where Next exclusively works.
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A buzzy trucking technology startup called Next Trucking laid off 70 workers this month, Next confirmed to Business Insider.
The job cuts slashed around 19% of Next's headcount, spokesperson Mike Bush told Business Insider. That lowers Next's employee count from around 370 to 300.
Bush said each department of the company was affected, eliminating the "least profitable" segments of Next.
The Los Angeles-based startup told affected employees on Jan. 17. They will receive 10 weeks of severance pay.
While a former employee shared with Business Insider that Next revenue goals were missed, sparking the layoffs, Bush said Next's revenue has increased every year since its founding in 2015.
Next is restructuring to focus on East Coast ports as volumes to California slow
Next has raised $134 million to date, according to Pitchbook data. Its largest investors include Brookfield Growth Partners, GLP, NGP, and Sequoia Capital.
Through a phone app, Next connects truck drivers and shippers in the Ports of Long Beach and Los Angeles. It competes in the much-hyped "digital freight brokerage" space, where tech giants like Uber, startups, and trucking incumbents are seeking to eliminate inefficiencies by automating the process in which truckers and shippers match.
Unlike its peers, Next focuses exclusively on drivers in the Ports of Long Beach and Los Angeles. Those ports are the busiest in the US. They process 32% of all containerized goods exported to the US, and employ one in nine workers across the five-county region.
Much of the electronics, clothing, and furniture that China exports to the US are carried through truck drivers at those ports before they reach Americans' homes.
But, as President Donald Trump's trade war still smarts the logistics community, ports on the East Coast have started to overtake the Southern California trade nexus. Last year, the Port of New York and New Jersey outpaced its West Coast rival in monthly volume shipments for the first time in decades.
Bush said Next is piloting a program in the Port of New York and New Jersey. It's the first program outside of the Ports of Long Beach and Los Angeles. Next is not currently hiring more employees or moving workers to the East Coast for the move, Bush said.
Headwinds are slamming the trucking industry more largely, too. A trucking recession forced the closures of around 640 companies in the first half of 2019, according to industry data from Broughton Capital. That's more than triple the amount of bankruptcies from the same period last year.
As for funding in the buzzy logistics-tech space, a Dec. 2019 Pitchbook report found that the median late-stage VC deal has tumbled from a record $30 million in 2018 to $26.2 million. Next's most recent funding round was Jan. 23, 2019.
Still, Bush emphasized that the main reason for Next's layoffs were internal restructuring and investing in units with the strongest revenue opportunities.