Flexport, a global supply chain solutions provider, is reducing its headcount by 2% as part of a reorganization aimed at helping the company drive profitability.
“We have strategically reorganized our Omnichannel business to further integrate our forwarding and fulfillment teams, a natural next step following our acquisition of Shopify Logistics 16 months ago,” a Flexport spokesperson told FreightWaves.
Last year, Flexport acquired e-commerce giant Shopify’s logistics arm, marking the company’s expansion into e-commerce fulfillment and last-mile delivery. In January, Flexport secured a $260 million investment from Shopify aimed at providing a boost during a challenging period in the freight economy.
“Integrating these teams created redundancies that allowed us to reduce our overall company headcount by about 2%,” the Flexport spokesperson said. “We continue to sharpen our focus on larger customers and drive down operating costs, giving us the ability to profitability scale our business and create value for both our customers and Flexport. We have made great progress towards our growth and profitability goals in 2024, and the reorganization will enable our teams to leverage Flexport’s full suite of logistics capabilities to solve customer problems and help them grow.”
In a memo sent to staff members Wednesday, Flexport CEO Ryan Petersen said the company still had work to do to hit its growth and profitability goals and needed to “move faster to get there.”
“These changes will increase our velocity in that direction, and set us up for a successful next few years of profitable growth,” according to an internal memo first seen by The Information.
A number of Flexport employees went on social media Wednesday to announce they were part of the latest round of layoffs.
“Well, my time at Flexport has ended due to another round of layoffs. Looking for a new role to thrive in and a company to grow with,” William Grant, who worked as a materials procurement analyst at Flexport, posted on LinkedIn.
Patrick Demian, a Flexport senior software engineer, also posted on LinkedIn, “What a long strange trip it’s been. Starting at Deliverr Inc., then being acquired by Shopify, then re-acquired by Flexport, then multiple rounds of layoffs. The latest one finally got me out, but not out for the count.”
Flexport was founded in 2013 by Petersen and is based in San Francisco. Since its founding, Flexport has raised $2.35 billion in capital and has been valued at as much as $8 billion by venture capitalists.
The latest round of job cuts is the fourth over the last two years for a company that at one time had 3,200 employees. In January, Flexport reduced its workforce by 20%, about 500 employees.
In January and October 2023, the company had two rounds of layoffs totaling 1,300 workers. In September 2023, Flexport’s board dismissed CEO Dave Clark.
Tim Teske
I consult for a 3PL who once did business with Deliverr, Shopify, and then Flexport. At the beginning we heard “urgency to get on board with a fast growing company. Then continued verbal promises to hit x number of daily orders. They hovered at 40% of that number for over 2 years. They praised us for the job we were doing while criticizing other 3PL’s. They dropped one of their 3PL’s to begin moving business to us. Then added another 3PL and directed business to the new guys probably because they entered at a lower cost than us. We never hit break even with them because we never got the volume they promised. Beware of their tactics and negotiate carefully on the front end. They flaunt big company, big opportunity sales pitch but intent to run thru 3PL’s to squeeze them on price. We’re glad we got rid of them.
Jodi Brown
Our company has been using Flexport for a couple of years. If your company is never in a hurry for delivery of goods I am sure Flexport is cost effective. Our management team stuck us with working with them and Flexport just does not fit into our company culture. Recently we had a shipment sit in LAX for days because our people did not reply for request of HTS code promptly. Flexport staff will not pick up the phone and call any one either.
Tim Gundlach
Ryan Petersen was to revolutionize the logistics industry. We heard countless times about how Flexport knew better than those of us that have dedicated our lifes to this industry. However, Flexport cannot seem to generate a profit. So, who actually knows best, those who are successful, or those who are burning cash to learn?
I also wonder how much of the investor’s money goes to being featured in media publications so that they can recruit addtional investors? Mr Ryan would have gotten more bang for his (investor’s) money, but taking some classes at the local Community College, or an intership at a real LSP.