Flexport slashes 20% of global workforce over weak 2023 volume forecast
Flexport is to cut 20% of its jobs, with impacted people receiving emails in the next few hours in Europe and North America, and tomorrow in Asia.
A letter to employees from co-CEOs Dave Clark and Ryan Petersen began with: “We begin the new year with more optimism than ever about Flexport’s future.”
But it went on to say: “While we are looking forward to what’s to come in 2023, we must also make hard decisions necessary to set us up for long-term success.
“We are overall in a good position, but are not immune to the macroeconomic downturn that has impacted businesses around the world. Our customers have been impacted by these challenging conditions, resulting in a reduction to our volume forecasts through 2023.
“Lower volumes, combined with improved efficiencies as a result of new organisational and operational structures, means we are overstaffed in a variety of roles across the company.”
The letter added that the company would reduce in size, impacting about 20% of its global workforce, some 600 people, under the restructuring.
Jobs are going in every department, across all geographies, but the company will continue to operate in all its regions, with no offices being closed. It is also hiring some 350 to 400 engineering and software staff, as it focuses on efficiency and technology.
US staff leaving the company will receive “12 weeks’ severance, six months extended healthcare, a 2022 bonus payment, equity vesting acceleration including dropping the vesting cliff for those with six months or more of tenure, immigration support, and ability to opt into our alumni talent directory to help with future job opportunities”.
There are no details for other regions.
But the company is also adding jobs – in technology. It said: “2023 is going to bring extraordinary velocity – we are in the process of doubling our software engineering talent and moving to single threaded business organisations to build world-class products faster, and we will continue to invest in delivering best-in-class operational execution for our customers.”
It said the slowdown would give it time to build up its technology, so that when 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. But to do that, we’re going to need to be nimble, fiscally responsible and focused on building fast with operational excellence”.
The letter ended: “We will come out of this economic downturn fit and up for any fight – to be our best and continue delivering amazing value and service for customers.”
(The full note to employees can be read here.)