Ryan Petersen, chief executive officer of Flexport, participates in a panel discussion during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Wednesday, May 4, 2022.
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Supply chain software startup Flexport is laying off 20% of its global workforce, or roughly 640 employees, according to a memo from co-CEOs Ryan Petersen and Dave Clark.
Petersen started Flexport in 2013 because he figured there had to be a better way to manage the flow of goods that get put on cargo ships, planes, trucks and railroads and transported all over the world. The company’s freight forwarding and brokerage services are in the cloud, enabling it to analyze costs, container efficiency, and greenhouse gas emissions quickly and with more accuracy than legacy systems.
The company topped last year’s CNBC Disruptor 50 list, as supply chain bottlenecks roiled the global economy and it raised $900 million from investors at an $8 billion valuation. But now the co-CEOs say the company is being challenged as higher interest rates around the world hit demand.
“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,” they wrote.
Last year, the company announced that Clark, the former worldwide consumer chief at Amazon, would take the helm as CEO of Flexport on Sept. 1, replacing Petersen, who plans to transition into the role of executive chairman this March.
“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,” the memo reads.
The company said layoff packages will vary by geography, but for U.S. employees will include 12 weeks severance, 6 months extended health care, 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 an alumni talent directory to help with future job opportunities.
Flexport joins a long list of tech companies cutting jobs after going on a hiring binge during the Covid pandemic.
Last week, Amazon said it would cut 18,000 jobs, more than the online retailer initially estimated last year, while Salesforce reduced its head count by more than 7,000, or 10%. Coinbase announced a 20% workforce reduction on Tuesday. Elon Musk slashed about half of Twitter’s workforce after taking the helm as CEO last year, and Meta cut more than 11,000 jobs, or 13%.
CNBC is now accepting nominations for the 2023 Disruptor 50 list – our 11th annual look at the most innovative venture-backed companies. Learn more about eligibility and how to submit an application by Friday, Feb. 17.
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