Flexport kicks off restructuring with layoffs
Flexport founder Ryan Petersen said in September — in the wake of his hand-picked CEO’s sudden departure — that the logistics company needed to get its house in order.
It started with Petersen rescinding dozens of employment offers and looking to lease out the company’s office space as it looks to get costs under control. Now, the company is laying off 20% of its workers, or about 600 people. The layoffs, which began October 13, are the latest drama to ripple through the company since Dave Clark resigned as CEO last month and Petersen, once again, reclaimed the top leadership post.
Petersen said in a blog post on the company’s website that he and a leadership team “evaluated every role in the company and its relationship to solving important supply chain problems for our customers. As a result, we are confident that this reduction in force will not impact the customer experience we provide to our customers today.”
Petersen also noted that the company has 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,” he wrote.
Clark, the former Amazon consumer chief, resigned suddenly in September. At the time, Petersen criticized Clark for overspending — specifically around hiring and expanding too quickly. It should be noted that Clark’s hiring and big “entrepreneurial” vision for Flexport was hardly a secret. Clark was actually co-CEO alongside Petersen his first six months on the job, at least according to Petersen’s own comments in September 2022. Petersen then stepped into an executive chairman role.
Petersen and the board also signed off on Flexport’s acquisition of Shopify’s logistics unit, marking a big expansion for the company that provides ocean, air, truck and rail freight forwarding and brokerage services. Shopify received stock that represented about 13% equity interest in Flexport as part of the agreement.
It’s unclear which departments were most affected by the layoffs. A Worker Adjustment and Retraining Notification notice stated that 165 workers in Bellevue, Washington have already been notified.
Petersen wrote in his blog post that support for Flexport employees will vary by geography. U.S. employees will receive nine weeks severance, two months extended healthcare through the end of the year and immigration support. Petersen said that a team of recruiters would be working with more than 300 companies to help laid off employees find new jobs.
