Flexport to slash 20% of workforce

Days after Flexport Chief Executive Ryan Petersen announced a $260 million investment from Shopify , Flexport is preparing to cut another 20% of its workforce. Flexport did not respond to requests for comment. Flexport’s plans to cut 20%, or about 500 jobs, from its budget, were first reported by The Information on Jan. 26. The digital freight forwarder in January 2023 cut 20% of its workforce — about 640 employees — four months after appointing former Amazon CEO Dave Clark as co-CEO with founder Petersen. Clark was ousted in September, just six months after becoming the company’s sole CEO, and Petersen resumed his role as CEO. Then Flexport chopped another 20% of its employees, dropping 20% of its workforce in October to 2,600, Air Cargo Next previously reported. [caption id="attachment_57140030" align="aligncenter" width="1258"] (Image/Air Cargo Next)[/caption] Petersen said he remained hopeful following October’s cuts that restructuring the company would help the company return to profitability in the coming months. “With more than $1 billion in net cash, following this change, Flexport is now in a great position to take advantage of the opportunities in front of us to return to profitability as soon as the end of next year,” Petersen said in an October memo to employees. “Today’s change does not change our commitment to pursuing our long-term technology vision. We see endless opportunities for technology to improve on-time performance and reliability, upgrade compliance processes and save businesses money in their global supply chain,” Petersen asserted in October. Skepticism looms Some analysts remain skeptical that Flexport has the funding to remain afloat. As first reported by The Information in September 2023, privately held Flexport saw a first-half revenue loss of 70%, leaving about $700 million in assets. “The Information indicated that Flexport, in 2023, has net revenue of less than $100M, with a plan to increase that to $330M next year,” Derek Lossing , senior adviser and founder of Cirrus Global Advisors , said in a social media post last month. Tech-heavy salaries and significant investment in talent in Flexport's leadership could contribute to losing hundreds of millions a year "with a freight market expected to be still quite favorable to shippers in (at least the first half) 2024,” Lossing posted on LinkedIn. If this is the case, then 2024 might bring a dramatic reduction of people in 2024 as well, Lossing said in the post. Nick Coverdale , CEO and co-founder of Utanga Technologies , a software-as-a-solution company that provides digital platforms for freight forwarders, also commented on the situation in a social media post on Jan. 28. “I can’t believe any shipper would entrust goods to them — and what happens when a freight company goes bankrupt [and] the cargo gets stuck all over the world and shippers incur massive loses?” he said on LinkedIn. Coverdale also criticized Flexport in the post for spending lavishly, saying that from Day 1, the company had “Class A offices with gourmet lunches and ping-pong tables.” “It could never work,” he said.

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