Flexport drops 20% of global workforce

In a memo from Flexport founder and Chief Executive Ryan Petersen last Thursday, the full-service digital freight forwarder announced 20% of staff would be terminated. The memo has since been published on the company’s website. [caption id="attachment_57138325" align="alignright" width="300"] Flexport founder and CEO, Ryan Petersen.[/caption] The layoffs began Friday, in what continues to be a tumultuous year for the San Francisco-based company. Flexport’s Bellevue, Wash., workforce was reduced by 165 employees on Monday, according to a report by the Seattle Times. Flexport employs more than 350 employees in the Seattle area, according to LinkedIn. Despite this, Flexport said its Bellevue location remains critical to operations. “As for the Flexport Bellevue office, it will remain one of our main technology and product development hubs,” Flexport spokesperson Cate DeBenedictis told Air Cargo Next . “Part of Flexport’s restructuring philosophy was to create an organizational structure that would best serve the needs of our customers — from enterprises to [small and medium-sized businesses] — and enable us to move quickly. “Our tech and product teams in Bellevue are integral to that mission, and we’ll continue investing in the solutions and tools to enable customer success and growth,” she added. Flexport laid off 20% of its staff , about 640 employees, in January, as well. The latest shakeup comes one month after Petersen announced a major restructuring of the company, which was founded in 2013. Petersen began by reinstating himself as CEO, cutting ties with Flexport’s previous CEO Dave Clark , a longtime Amazon CEO who served in the role at Flexport since September 2022. Petersen said on X, formerly Twitter, on Sept. 7, that Flexport needed to carve a new path to profitability, writing, “It’s clear that important changes are needed to sustain our growth and return to profitability.” In another X post on Sept. 8, Petersen rescinded more than 75 signed job offer letters . “I am deeply sorry to those people who were expecting to join our company and won’t be able to at this time,” Petersen wrote in the X post announcing the rescissions. “It’s messed up. But no way around it, we have had a hiring freeze for months, I have no idea why more than 75 people were signed to join. Or why we had over 200 open roles are on our website.” Clark’s departure prompted several top executives to resign. And in late September, Kenny Wagers , Flexport’s chief financial officer, and Jennifer Boden , human resources chief, were ousted. Longtime Flexport finance executive Stuart Leung stepped in as chief financial officer. Recovery period The company retained 3,500 employees before last week’s cuts were announced, according to a September report by CNBC. This means about 700 people were fired Friday. “Right now, the company is trying to restructure and recover from the mistakes of the past two years,” Rick Watson , CEO at RMW Commerce Consulting , told Air Cargo Next . Flexport “picked the wrong CEO and overexpanded. The recent layoffs are a result of a company trying to reset and get its costs under control so that it does not have to raise money again soon.” From his experience with Amazon, Clark was accustomed to building physical infrastructure, Watson said. This is why he was the wrong pick for a forward-thinking technology company, which is a “different type of business,” he said. “Whether the company is making the right moves depends on your point of view,” Watson said. “I think the entire concept has been overvalued due to the pandemic spike. Dave Clark was the wrong choice as CEO and this is the inevitable result.” Flexport acquired Shopify Logistics in May under Clark, with Shopify trading its assets for a 13% equity stake in Flexport, worth about $1 billion, according to a release from the company. Privately held Flexport was valued at $8 billion at that time. CEO looks ahead “ 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 last week’s memo. “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.

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