Ryan Petersen, chief executive officer of Flexport, participates in a panel discussion during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Wednesday, May 4, 2022.
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Supply chain software startup Flexport plans to cut approximately 20% of its global workforce as part of a new round of layoffs that’s expected to begin on Friday, CNBC has learned.
Flexport CEO Ryan Petersen sent a note to staffers Thursday afternoon informing them of the job cuts, according to a copy of the memo viewed by CNBC. The company will inform employees of whether they’re impacted or not via email beginning Friday morning, Petersen wrote.
“Today I have a difficult decision to share: We will reduce the size of our global team by approximately 20% with the process starting tomorrow, Friday, October 13,” Petersen wrote.
A Flexport spokesperson pointed CNBC to a company blog post from Petersen confirming the layoffs. The spokesperson declined to share Flexport’s total headcount. The company employed approximately 3,500 people as of late September, according to Pitchbook data.
The layoffs add to recent turmoil at the company since Petersen returned as CEO last month after abruptly ousting his hand-picked successor Dave Clark. Petersen claimed repeatedly that Clark, a 23-year veteran of Amazon, overspent and overhired during his tenure at Flexport. But documents viewed by CNBC, and sources close to Clark, showed that Petersen and members of Flexport’s board helped implement decisions that Flexport has suggested were ill-advised.
Since taking back the helm, Petersen quickly overhauled the company’s top ranks, ousting several of Clark’s key recruits, as well as its CFO and HR chief. He also rescinded 55 offer letters and moved to lease out unoccupied office space across the country.
In the blog post, Petersen said following the cuts Flexport will be “in a great position to take advantage of the opportunities in front of us to return to profitability as soon as the end of next year.” The move will “not impact the customer experience,” Petersen added. He said the company is focused on the quality of its services like quote to invoice accuracy and shipment milestone accuracy.
“Today is a tough day, but we are a resilient, purpose-driven team that will overcome this setback and deliver on the promise of our mission of making global commerce so easy that there will be more of it,” he said.
Petersen wrote in the memo that employees in the U.S. and Canada are being directed to work from home on Friday unless they work out of a Flexport warehouse. Staffers based in Asia will be contacted about the layoffs on Monday, according to the memo.
For U.S. employees, the company is offering nine weeks of severance, health care coverage through the end of the year, immigration support and job recruiting assistance, Petersen said in the memo. Staffers located outside of the U.S. will receive information about their separation packages at a later date.