- Flexport began the process of laying off roughly 20% of its global workforce Wednesday.
- Co-CEOs Dave Clark and Ryan Petersen told staff "we're going to need to be nimble"
Flexport, a supply chain startup with an $8 billion valuation, told employees on Wednesday it is laying off 20% of staff as a result of the global downturn in trade and a new, more efficient corporate structure.
The cuts will come from offices across the world, according to a message sent to Flexport employees from co-CEOs Ryan Petersen, who founded the company in 2013, and Dave Clark, who joined Flexport in September after two decades at Amazon.
Flexport is the middleman between carriers like ocean shipping lines, airlines, and trucking firms and the companies with goods to move. The unicorn startup has raised billions on the promise of bringing more technology and transparency to an opaque supply chain.
Flexport makes money when it facilitates these freight moves, so when the amount of freight moving around the world declines, so does its revenue.
"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 co-CEOs wrote to staff.
The company had a round of layoffs in early 2020, when trade dipped as the spread of COVID-19 spooked supply chains. What followed was a boom for nearly all supply chain service providers, including Flexport. But that fire hose of freight is now more of a trickle, and many logistics businesses are right-sizing their workforces to adjust to the new market reality.
Flexport announced last year that it would replace founder and CEO Ryan Petersen with Amazon's former Amazon Worldwide Consumer CEO Dave Clark. The two are currently working as co-CEOs as Petersen transitions into the role of executive chairman.
After a $935 million Series E round in February that valued Flexport at $8 billion, Petersen recently told The Verge's Decoder podcast the company has $1.2 billion in cash in the bank. Clark's mandate is to scale and broaden Flexport's impact.
Since his start, Clark has brought in several high-placed former Amazonian executives including Tim Collins as senior vice president of operations, Darcie Henry as the new chief human-resources officer, and most recently Teresa Carlson as chief commercial officer and president.
Read the full message sent from Clark and Petersen to all Flexport employees here:
Team,
We begin the New Year with more optimism than ever about Flexport's future. There is a lot to be proud of — together as a team, we have made significant strides to streamline our operations and strengthen our commitment to build the best technology and products for the benefit of current and future customers.
While we are looking forward to what's to come in 2023, we must also make hard decisions necessary to set us up for long-term success. We are overall in a good position, but are not immune to the macroeconomic downturn that has impacted businesses around the world. Our customers have been impacted by these challenging conditions, resulting in a reduction to our volume forecasts 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.
As a result, today we are reducing the size of our organization and we will unfortunately say goodbye to a group of talented Flexporters. We are grateful for the contributions of those who are leaving, and each departing Flexporter has our gratitude for their contributions to the company. They will be treated with respect and dignity as their Flexport chapter comes to a close and we wish them great success in their future endeavors.
Supporting Departing Flexporters
Every Flexporter whose role is being eliminated will be notified by email with information specific to them and their exit. In the US, Canada, and Europe these notifications will be received in the next few hours. In APAC, local HR teams will reach out to those impacted in the next full working day (Jan 12). Impacted employees account for approximately 20% of our global workforce.
Departure support will vary by geography. For US employees it includes 12 weeks severance, 6 months extended healthcare, 2022 bonus payment, equity vesting acceleration including dropping the vesting cliff for those with 6 months or more of tenure, immigration support, and ability to opt into our alumni talent directory to help with future job opportunities.
The Road Ahead for Flexport
At Flexport, 2023 is going to bring extraordinary velocity – we are in the process of doubling our software engineering talent and moving to single threaded business organizations to build world class products faster, and we will continue to invest in delivering best-in-class operational execution for our customers.
The current slowdown in volume gives us time to focus on building our technology bench while the economy lags. 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.
We will come out of this economic downturn fit and up for any fight – to be our best and continue delivering amazing value and service for customers.
Dave and Ryan