Supply chain tech firm Flexport is laying off 20% of its global workforce.
Flexport Co-CEOs Dave Clark and Ryan Petersen said in a note to employees that the company is not immune to the macroeconomic downturn and that it must make hard decisions to prepare for long-term success.
“Our customers have been impacted by these challenging conditions, resulting in a reduction to our volume forecasts through 2023,” they said. “Lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, means we are overstaffed in a variety of roles across the country.”
At the same time, Flexport is in the process of doubling its software engineering talent and making operational changes to build products faster, according to the note.
“The current slowdown in volume gives us time to focus on building our technology bench while the economy lags,” Clark and Petersen said in the note. “Then, as the economy recovers, we will be ready to be the Flexport that we all want to be — the one stop for customers to make the movement of goods around the world easy.”
Freight and shipping stakeholders are more willing to improve their processes after the supply chain snags that caused them so many pain points over the last few years, Flexport Chief Financial Officer Kenny Wagers told PYMNTS’ Karen Webster in a December interview.
“The human aspect, the manual portion of [data entry and invoicing] has had to be reinvented over the past few years in the freight industry,” Wagers said at the time.
However, as PYMNTS reported in October, a titanic shift in demand momentum forced shipping companies to brace for a slowdown in what would typically be a busy season for ocean vessels sailing goods to merchants around the world.
Where there had been supply chain bottlenecks and inventory shortages during the pandemic, there were now empty containers and over-packed warehouses.
Tech companies in other verticals have also been impacted by the macroeconomic slowdown and laid off 153,000 workers in 2022 — a figure that was up from 15,000 in 2021 and 80,000 between March and December 2020, according to Layoffs.fyi.
The new year has seen Amazon say it will eliminate 18,000 jobs and Coinbase say it will cut 950 jobs.
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