One Month After CEO Shakeup, Flexport Plans to Reduce Workforce by 20%
Flexport, a supply chain management company, has revealed its plans to reduce its workforce by 20% just one month after a tumultuous CEO transition that unfolded publicly, including on social media platforms.
In a communication addressed to the company's employees, Ryan Petersen, who founded Flexport in 2013 and currently serves as its CEO, stated that the decision to trim the workforce was a strategic move aimed at restoring the company's profitability without necessitating price increases.
Petersen's announcement follows a recent CEO transition that witnessed the return of Petersen to his role as CEO, succeeding Dave Clark, a former Amazon executive who had assumed the position just a year ago. Clark had announced his resignation, and shortly after Petersen's return, numerous high-level employees hired during Clark's tenure were reportedly let go, as reported by various media outlets.
Moreover, last month, Petersen also declared that Flexport would be rescinding job offers that had been extended to potential hires, mere days before some of them were set to commence their roles. On social media, Petersen expressed his regret, stating, "I am deeply sorry to those people who were expecting to join our company and won't be able to at this time. It's messed up. But no way around it." He also disclosed that he was uncertain why 75 people had been slated to join, and the company would be canceling 200 open job postings on its website as part of its efforts to restructure.
In the memo announcing the layoffs scheduled for the coming Friday, Petersen mentioned that he and his leadership team had spent the past month scrutinizing every role within the company and its relevance to addressing critical supply chain issues for their clientele. He expressed confidence that this staff reduction would not adversely affect the customer experience provided to their current customers.
Notably, this marks the second major workforce reduction by Flexport this year, despite having secured over $2 billion in funding from venture capital firms. In January, the company had already laid off approximately 20% of its global workforce, amounting to around 600 employees. During that period, Flexport had attributed the staff reduction to a "macroeconomic downturn affecting businesses worldwide."