The company plans to lay off about 20% of its global employees, marking a notable shift in its operational strategy. This decision was disclosed in a memo sent by CEO Ryan Petersen to the company’s staff on a Thursday afternoon, with CNBC obtaining a copy of the memo for review.
The layoffs are set to commence on Friday, October 13, as per Petersen’s communication. Affected employees will be notified via email starting Friday morning. This move reflects a challenging phase for Flexport, which employed approximately 3,500 people as of late September, according to data from Pitchbook.
The decision for layoffs follows a period of internal turmoil at Flexport, particularly after Ryan Petersen reassumed the CEO role last month. Petersen had replaced his chosen successor, Dave Clark, a former Amazon executive with 23 years of experience. The change in leadership stemmed from allegations that Clark had engaged in excessive spending and hiring during his tenure. However, CNBC reports, based on documents and sources close to Clark, suggest that Petersen and some board members of Flexport were also involved in some of the criticized decisions.
Upon his return, Petersen undertook a significant overhaul of the company’s leadership. This overhaul included the dismissal of several key figures recruited by Clark, including the CFO and HR chief. Additionally, Petersen canceled 55 job offers and initiated the leasing out of unused office spaces across the United States.
In a blog post, Petersen outlined the company’s future direction following the layoffs. He expressed confidence that these measures would position Flexport favorably to achieve profitability by the end of the following year. Petersen assured that the customer experience would remain unaffected and emphasized the company’s commitment to service quality, including accuracy in quotes, invoices, and shipment milestones.
Petersen described the day of the announcement as challenging but reaffirmed the resilience and purpose-driven nature of the Flexport team. He stressed the company’s dedication to its mission of facilitating global commerce.
For employees based in the U.S. and Canada, the company advised working from home on the day following the announcement, except for those working in Flexport warehouses. Staff in Asia would be informed about the layoffs on the following Monday. As part of the severance package, U.S. employees are being offered nine weeks of severance pay, healthcare coverage through the end of the year, immigration support, and job recruiting assistance. Details of severance packages for employees outside the U.S. are to be provided at a later date.
Maybe it was to get funds to purchase Convoy’s software?
