Flexport is reportedly planning another layoff of 20% at the freight forwarder, which is still on the road to financial recovery. The Information is the first to quote an anonymous source “familiar with the matter.”
This can translate to 500 employees who must pack up their desks if the reports are correct. There is no formal confirmation from Flexport at the time of publishing.
The last update on CEO Ryan Petersen’s LinkedIn account states: “Since I came back to the CEO role last fall, our team has made massive progress toward returning Flexport to profitability.”
The impact of a further reduction of the team could have significant outcomes, as it just reduced staff by another 20% in October in areas such as software development. Petersen then said it was necessary to “return the company to profitability without raising prices.”
The news of a further reduction has been met with question marks, as Shopify just invested $260 million in Flexport. The company announced it last week.
The reason: To build a “leading end-to-end global logistics technology platform.” Petersen says in a statement they want to strengthen their cash position with this investment.
With this investment, Flexport wanted to send out a strong message to investors that their “fortress balance sheet continues to be one of our most strategic assets.” They want to ensure potential investors can find stability in Flexport while it “navigates the uncertain waters of global trade.”
Reducing staff by 20% but buying Convoy assets
According to The Information, around 2,600 employees remained at the company after the last round of retrenchments. If information about a further 20% reduction is accurate, it could push the staff complement to just under 2,000.
In November, Flexport bought Convoy’s technology stack. Petersen confirmed they also “planned to retain a small group of team members from Convoy’s core product and engineering team.”
Petersen acknowledged then that he and his team would have to “remain disciplined and focused” to integrate the technology successfully.
Flexport leadership troubles
In September, Petersen fired his co-CEO, Dave Clark, and returned to the hot seat to clean up what he called a mess in the company.
In May 2023, not long after Clark arrived at Flexport, he wrote about the accomplishment of acquiring the assets of Shopify Logistics. He called it an “exciting time” for the company. But clearly, Petersen was not impressed with his performance and gave him the boot.
Following Clark’s departure, several other colleagues also left, in what was seen as a show of defiance to the changes Petersen was making.
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