Flexport Layoffs: 20% Staff Cuts As Supply Chain Software Startup Pursues Profitability

Flexport layoffs will impact 20% of staff at the supply chain software and logistics startup, CEO Ryan Petersen (pictured, top of page) wrote in an email to Flexport staff. The layoffs surfaced one month after numerous executive suite changes at the company.

Flexport's global logistics software platform helps customers to automate their supply chains. An associated Flexport.org website focuses on social and environmental impact, and features a carbon calculator to help users estimate emissions from their Flexport-oriented shipments.

Some of the world's best-known venture capital firms and investors -- including Andreessen Horowitz and Michael Dell’s MSD Partners -- funded Flexport when technology startup valuations were at all-time highs in early 2022.

The October 2023 headcount cuts position the company to potentially return to profitability by the end of 2024, Petersen indicated.

Flexport Timeline: Funding, Executive Leadership Recap

Here's a timeline tracking Flexport's rise and recent challenges:

• 2013: Company founded.
• February 2022 - Late-Stage Funding: Raised $935 million in Series E funding at an $8 billion valuation -- right around the time that startup valuation multiples were peaking. Key investors include Andreessen Horowitz and Michael Dell’s MSD Partners, and includes a strategic investment from Shopify. Existing investors including DST Global, Founders Fund, SoftBank’s Vision Fund I and former Greylock VC Kevin Kwok also participated in the round, CNBC noted. Total funding at the company since inception is roughly $2.3 billion.
• September 2022 - New CEO: Hired Amazon veteran Dave Clark as CEO. Clark, in turn, hired multiple executives.
• January 2023 - Layoffs: Flexport cut 20% of staff amid slowing demand for freight management.
• June 2023 - Acquisition: Aacquired Shopify Logistics. Shopify received stock representing a 13% equity interest in Flexport, which was incremental to Shopify's existing equity interest in Flexport.
• September 2023 - New CEO (Again): Dave Clark resigned after only one year on the job. The company has since dismissed at least six executives hired by Clark, The Wall Street Journal reported. Founder Ryan Petersen returned to the CEO post.
• September 2023 - Falling Valuation: Flexport's valuation had fallen roughly 80% to $1.4 billion to $1.6 billion, CB Insights estimated.
• October 2023 - More Layoffs: The company cut roughly 20% of staff. The company had 3,509 employees listed on LinkedIn as of Friday, October 13, 2023. The company's actual headcount figures are undisclosed.

Flexport Pursues Profitability: The cuts provide Flexport with the opportunity to "return to profitability as soon as the end of next year," Petersen said in a note. In the meantime, the company has more than $1 billion in net cash to fund operations.

Growing Green Job Market Faces Targeted Layoffs, Staff Cuts

Meanwhile, the overall sustainability job market remains strong -- as businesses seek employees to fill green IT, renewable energy, and energy transition jobs.

Indeed, demand for green jobs in the United States has grown roughly 50% since 2019, according to Lightcast. In response, Goodwill and Accenture launched a green jobs training initiative in October 2023. Also, the White House in September 2023 unveiled the American Climate Corps., a new "workforce training and service initiative."

Still, the rising tide involving green jobs will not lift all boats. Sustainability-oriented companies announcing staff cuts in 2023 so far have included:

• October 2023: Maxeon Solar Technologies layoffs impacted roughly 15% of the solar company's global workforce.
• September 2023: Morningstar Sustainalytics layoffs impacted roughly 10% to 12% of employees at the ESG (environmental, social, governance) data, research and ratings firm.
• September 2023: ChargePoint layoffs hit 10% of its staff and reorganized operations amid weaker-than-expected quarterly revenue guidance from the electric vehicle (EV) charging station network company.

What's next? We'll be watching Petersen's next moves at Flexport.