Flexport confirms second round of layoffs, with 20% of its staff to go

CLOUD

Troubled logistics and supply chain software firm Flexport Inc. has confirmed it will lay off about 20% of its staff, in what is the second major round of job cuts it has embarked on this year.

CNBC was the first to report the news, saying Flexport’s workforce was first informed of the job cuts this afternoon through an internal memo. The layoffs were then officially confirmed in a blog post written by Flexport founder and Chief Executive Ryan Petersen several hours later. He explained that affected staff will be informed via email starting Friday morning.

“Today I have a difficult decision to share,” Petersen wrote in the blog post. “We will reduce the size of our global team by approximately 20% with the process starting tomorrow, Friday, October 13.”

The cuts are likely to affect around 700 employees, as data from PitchBook shows the company had employed around 3,500 staff at the end of September.

Workers at Flexport have already endured a chaotic year at the company, beginning with an initial round of job cuts in January that affected 20% of its employees. Then in March, Petersen stepped down from his CEO role in favor of a hand-picked successor, the former Amazon.com Inc. logistics executive Dave Clark, who originally joined the company as co-CEO in 2022.

After assuming sole leadership of Flexport, Clark immediately went on a hiring spree, adding numerous hand-picked executives and oversaw Flexport’s acquisition of Shopify Inc.’s logistics arm.

Then in September, Petersen did a complete U-turn and abruptly ousted Clark from the CEO role, blaming disagreements over the direction of the company and its financial priorities. Clark’s departure initially appeared to be an amicable one, but CNBC later reported that Petersen had been critical of Clark over his aggressive hiring spree. Clark responded with a post on X, formerly Twitter, saying he had uncovered major problems with Flexport’s revenue forecasting model.

“The company had missed cost, margin and revenue forecasts for multiple quarters prior to my arrival,” Clark said. “Flexport is facing serious internal and industry challenges that require serious leadership, and I sincerely hope they find a successful path.”

With Petersen back in charge, he rapidly fired 11 of the company’s senior executives, including many of Clark’s new hires. One of the most notable names to depart Flexport was former Microsoft Corp. and Amazon executive Teresa Carlson, who had been brought in by Clark as president and chief commercial officer. Flexport Chief Financial Officer Kenny Wagers was also let go. Additionally, Petersen rescinded a number of job offers to other individuals that were made by Clark.

Petersen said today the layoffs will put Flexport in a great position to take advantage of the opportunities in front of it and return to profitability by the end of next year. He promised that the decision will not impact customer experience, adding that the company is now focused on improving the quality of its services.

“Today is a tough day, but we are a resilient, purpose-driven team that will overcome this setback and deliver on the promise of our mission of making global commerce so easy that there will be more of it,” he said.

Petersen said U.S. and Canada-based staff should work from home Friday while they wait to see if they have a future at the company or not, unless they work out of one of the company’s warehouses. Employees based in Asia will have to wait until Monday to see if they are being laid off.

U.S. employees will receive nine weeks of severance pay, healthcare coverage until the end of the year, immigration support and assistance in seeking new employment, Petersen said in the memo.

Photo: Flexport