Logistics startup Flexport is reportedly laying off around 20% of its workforce as the company attempts to adapt to a shipping industry slowdown.
Around 500 of the company’s roughly 2,600 employees would be affected by the move, which follows similar 20% reductions in January and October 2023, despite Flexport’s recent announcement that it had raised $260m in an investment from e-commerce company Shopify.
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The layoffs, first reported by The Information, follow a tumultuous 2023 for the company which not only carried out multiple other job cuts but also saw its founder Ryan Petersen force out his successor Dave Clark as CEO to take back the job himself.
While the company is yet to comment on the reports of further layoffs, it has cited a desire to return to profitability without raising prices during previous moves, reflecting its struggle to maintain the soaring success seen by shipping companies when online shopping drastically increased during the Covid-19 pandemic.
Flexport is not the only logistics company to be suffering recently, with the wider shipping industry hit by a plethora of issues in the last year, including the ongoing conflict in the Red Sea, traffic restrictions at the drought-hit Panama Canal, and a struggling global economy.
Despite this, the startup said that the recent investment from Shopify, in the form of an uncapped convertible note, would send a “strong message” to customers that it was building a “long-term sustainable business”.
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By GlobalData
