Flexport to lay off 20% of its global workforce
Ryan Petersen, chief executive officer of Flexport, participates in a panel discussion during the Milken Institute Global Conference in Beverly Hills, California, U.S., 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 felt there needed to be a better way to manage the flow of goods that were put on cargo ships, planes, trucks and railways and transported around the world. The company’s freight and brokerage services are in the cloud, enabling it to analyze costs, container efficiency and greenhouse gas emissions faster and more accurately than legacy systems.
The company topped last year’s CNBC Disruptor 50 list as supply chain disruptions rocked 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.
“As we look forward to what’s to come in 2023, we must also make the tough decisions necessary to set us up for long-term success. We’re in a good position overall, but we’re not immune to the macroeconomic downturn that has impacted businesses worldwide. Our customers have been impacted by these challenging conditions, resulting in a reduction in our volume forecasts through 2023. Lower volumes, combined with improved efficiencies as a result of new organizational structures and operationally, it means we are overloaded in a variety of roles across the company,” they wrote.
Last year, the company announced that Clark, the former head of worldwide consumer affairs at Amazon, would take over as CEO of Flexport on Sept. 1, replacing Petersen, who plans to move into the role of executive chairman this March.
“As the economy recovers, we’ll be poised to be the Flexport we all want to be—the one-stop shop for customers to make moving goods around the world easy. But to do that, we’ll need to be agile, fiscally responsible and focused on rapid construction with operational excellence,” the memo said.
The company said severance packages will vary by geography, but for U.S. employees it will include 12 weeks of severance, 6 months of extended health care, 2022 bonus payment, accelerated vesting, including cliff removal of coverage for those with 6 months or more tenure, immigration support, and the ability to select a graduate talent directory to assist with future job opportunities.
Flexport joins a long list of tech companies cutting jobs after going on a hiring spree 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 cut its workforce by more than 7,000, or 10%. Coinbase announced a 20% workforce reduction on Tuesday. Elon Musk cut about half of Twitter’s workforce after taking over 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, February 17.