Flexport will lay off 20% of its global workforce

Supply chain software startup Flexport is laying off 20% of its global workforce, or about 640 employees, according to a memo from co-CEOs Ryan Petersen and Dave Clark.

Petersen started Flexport in 201[ads1]3 because he believed there had to be a better way to manage the flow of goods that are put on cargo ships, planes, trucks and railways and transported around the world. The company’s forwarding and brokerage services are in the cloud, making it possible to analyze costs, container efficiency and greenhouse gas emissions quickly and with more accuracy than legacy systems.

The company topped last year’s CNBC Disruptor 50 list, as supply chain bottlenecks ravaged the global economy, and it raised $900 million from investors at a valuation of $8 billion. But now the co-CEOs say the company is being challenged as higher interest rates around the world hit demand.

“While we look forward to what’s to come in 2023, we must also make the difficult decisions necessary to set ourselves up for long-term success. We are generally in a good position, but are 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 resulting from new organizational and operational structures, mean we are overstaffed in a variety of roles across the company,” they wrote.

Last year, the company announced that Clark, the former worldwide head of consumer goods at Amazon, would take the helm as CEO of Flexport on Sept. 1, replacing Petersen, who plans to transition to the role of executive chairman in March.

“When the economy recovers, we will be ready to be the Flexport that we all want to be – a one-stop shop for customers to make moving goods around the world easy. But to do that, we need to be nimble, economical responsible and focused on building quickly with operational excellence,” the memo said.

The company said layoff packages will vary by geography, but for U.S. employees it will include 12 weeks of severance pay, 6 months of extended health care, bonus payouts in 2022, acceleration of equity vesting including letting go of vesting for those with 6 months of tenure or more, immigration support, and the ability to to select an alumni 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 originally estimated last year, while Salesforce cut its workforce by more than 7,000, or 10%. Coin base announced a 20% reduction in its workforce on Tuesday. Elon Musk cut roughly half of Twitter’s workforce after taking the helm as CEO last year, and Meta cut more than 11,000 jobs, or 13%.