New Flexport Layoffs Trim 30% in Fresh Round of Job Cuts
Flexport’s roller coaster of a year continues with massive job cuts as the supply chain tech firm works to become profitable.
The digital freight forwarder is laying off up to 30 percent of employees, according to several news reports. The Information reported that the cuts total around 1,000 based on a total headcount of about 3,300.
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A Flexport spokesperson declined to comment on the layoffs reports.
The job cuts are the latest efforts to reshape the business since founder Ryan Petersen returned as CEO after his onetime successor Dave Clark left amid collapsing revenue.
“Ryan has been very transparent in the need to drive the growth and cost discipline required to return Flexport to profitability,” the spokesperson told Sourcing Journal. “We will do so in a way that doesn’t impact customer service and our ability to help grow our customers’ businesses.”
The departure of Clark, an Amazon veteran, led to the exit or dismissal of several executives, including another former Amazon leader, Teresa Carlson, who joined Flexport as president and chief commercial officer in January.
Multiple other executives recruited by Clark after he first joined Flexport in 2022, including executive vice president of global operations Tim Collins and vice president and chief of staff Kelly Cheeseman, were also let go. Chief financial officer Kenny Wagers, who predated Clark’s tenure at the company, was dismissed as well.
Rick Watson, CEO and founder, RMW Commerce Consulting, told Sourcing Journal he would not be surprised if many of the layoffs were also recent Clark hires, or part of the Deliverr fulfillment technology Flexport acquired from Shopify .
Flexport started the year with job cuts. At the time of Carlson’s hiring in January, the company cut approximately 20 percent of its global workforce, or roughly 640 workers, to deal with a demand downturn this year.
But volumes fell farther than Flexport anticipated, and coincided with collapsing freight rates that cut into the company’s top line. The Information reported in September that Flexport’s revenue fell nearly 70 percent in the first half of 2023 to nearly $700 million. Petersen said Flexport has $1 billion in net cash.
“At the company’s previous spending levels, Flexport was likely going to have to raise money next year,” Watson said. “At this stage, the goal is to extend the company’s runway so that it does not need to raise money in 2024.”
Petersen and Clark appeared to disagree over Flexport’s future, with the founder criticizing what he felt was a lack of focus on customer engagement. On X, previously known as Twitter, Petersen has alluded to wanting to cut the freight forwarder’s spending habits under Clark, and said Flexport was rescinding dozens of job offers.
“No way around it, we have had a hiring freeze for months,” Petersen said early last month. “I have no idea why more than 75 people were signed to join. Or why we had over 200 open roles are on our web site.”
At the North American Supply Chain Executive Summit in Phoenix on Sept. 13, less than a week after he left Flexport , Clark took a shot at the decision-making process that led the company to oust him and his colleagues.
“The only thing I really regret from the past year was I sort of picked the wrong founder,” Clark said. “Basically, it was a place of extending my reputational halo to a group that, in my opinion, didn’t deserve it. Largely, because about half the team was let go last week on Friday, the most brutal nonseverance packages I’ve ever seen in my life. It was about as disrespectful a way as humanly possible.”
On Monday, the 23-year Amazon exec cited “serious internal and industry challenges that require serious leadership” at Flexport, and suggested that the spending habits started before his tenure, according to a post on X.
The CNBC article Clark shared offers details into his exit, stating that the Flexport board fired him for cause a day after he already resigned. The article reported that Clark denied an offer to keep 2 million shares of Flexport, which would have required him to sign a separation agreement that included nondisclosure and non-disparagement clauses.
With the massive downsizing, Flexport aims to bring the focus back to its core freight business simplifying and democratizing global trade. The company’s spending cuts doesn’t seem to be affecting its tech priorities
Flexport recently launched two new supply chain tools for customers: the Revolution self-service offering for SMBs—which Petersen calls “TurboTax for importing and selling goods”—and the Flexport+ subscription service, which includes priority shipment handling and access to financing and concierge services.
Revolution, built from the Deliverr platform, gives merchants access to more than 20 supply chain services, including freight services, fulfillment and replenishment, customs paperwork and product storage all in one place.
