Flexport Announces Workforce Restructuring, Reducing Staff by 20%

Flexport, a supply chain software startup, has announced plans to reduce its global workforce by approximately 20%, initiating a new round of layoffs starting on Friday, according to sources familiar with the matter.

The company’s CEO, Ryan Petersen, shared a memo with employees on Thursday, informing them about the job cuts. The company will notify affected employees by email beginning Friday morning.

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

The layoffs were confirmed in a blog post by Petersen. However, the company declined to disclose its total headcount. According to Pitchbook data, Flexport had around 3,500 employees as of late September.

These layoffs come amid recent turbulence at Flexport, following Petersen’s return as CEO after abruptly removing his hand-picked successor, Dave Clark. Petersen has accused Clark of overspending and overhiring during his tenure, but documents and sources close to Clark suggest that Petersen and the company’s board were involved in decisions that Flexport now claims were misguided.

Since reclaiming his position, Petersen has made significant changes to the company’s leadership, removing key recruits of Clark, as well as the CFO and HR chief. Additionally, 55 offer letters were rescinded, and unoccupied office spaces across the country were leased out.

In the blog post, Petersen expressed confidence in Flexport’s future profitability after the layoffs, stating that the company will be “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 emphasized that the customer experience will remain unaffected and highlighted the company’s commitment to service quality.

“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,” Petersen said.

Petersen informed employees in the U.S. and Canada that they are expected to work from home on Friday, unless they work at a Flexport warehouse. Employees in Asia will be notified about the layoffs on Monday.

U.S. employees affected by the layoffs will receive nine weeks of severance, healthcare coverage until the end of the year, immigration support, and job recruiting assistance, according to the memo. Non-U.S. employees will receive information about their separation packages at a later date.