Just weeks after ousting the company's chief executive and reclaiming that title for himself, Flexport founder Ryan Petersen is slashing the logistics company's workforce by a fifth.
Petersen announced the layoffs in an email to employees on Thursday, which the company then shared publicly in a blog post.
"Over the last month my leadership team and I evaluated every role in the company and its relationship to solving important supply chain problems for our customers. As a result, we are confident that this reduction in force will not impact the customer experience we provide to our customers today," Petersen wrote.
Petersen also expects the cuts to help Flexport "return to profitability" by the end of 2024, he wrote in the post.
A nonpublic version of the announcement reviewed by the San Francisco Business Times also asks all of its employees in the U.S. and Canada to work from home Friday, except for anyone who typically works in a warehouse or fulfillment center. Employees will be notified by email to confirm their employment status.
Employees will be notified on Friday as to whether or not their positions are cut, the announcement said, and for those cut, the company is offering nine weeks of severance, health care benefits through the end of the year, immigration support and job search assistance.
That severance package is disappointing and feels like the bare minimum, a current employee told me. The Business Times verified the employee's identity and granted him anonymity so the person could speak candidly.
Over the past year, other companies have offered employees much bigger severance packages, according to a roundup at Business Insider. Google and Meta both offered a minimum of 16 weeks of pay and six months of health benefits. Salesforce offered five months of pay and health benefits. Twitter offered three months of pay.
The company also cut 20% of its workforce in January which involved around 640 people, CNBC reported at that time, making this Flexport’s second round of layoffs this year.
"I'm most annoyed about the lack of communication" this time, the current employee also told me. During the previous round of cuts, there was at least some indication of which teams could be affected, but "it feels like this round is up in the air."
Asked for comment, a Flexport spokesperson referred me back to Petersen's posted memo.
The WSJ reported on Oct. 5 that Flexport was considering cutting up to 30% of its global workforce.
Petersen co-founded Flexport in 2013 and stepped down as co-CEO earlier this year, a title he shared with Dave Clark for six months during a transition period, after which Clark was expected to remain as the company's permanent CEO.
Clark accepted the position at Flexport after spending more than two decades at Amazon where he ended his career as the e-commerce giant's head of worldwide consumer operations.
But Clark resigned at the beginning of September, after serving as Flexport's sole CEO for just six months, and Petersen stepped back into the role.
"Founders have the right to change their mind," Clark wrote on X at the time of his departure. "I came to Flexport to do big things and that's where I believe we were headed."
Clark had actually been ousted by Petersen, according to a report from CNBC, and the pace of hiring was among the issues they reportedly disagreed about.
That behind-the-scenes drama caused some chaos for employees.
"When Ryan was leaving for the first time, I think there was a lack of leadership," the current employee told me, and "it felt like a bro's club."
Clark's arrival was welcomed at first but "over time it felt like Dave was bringing in his own people, middle managers and VPs ... and it swung the other way," the current employee said. "Ryan is undoing that" but "it was a weird scenario."
Their differing visions for the company led to confusion.
"We didn't really know what we were doing," the current employee said, "like what the next steps were and the long term vision for the company."
On Sept. 6, Petersen posted on X: "I'm back!!!" A day later he wrote: "Strategic Plan, Day 1: Make better decisions!" And on Sept. 8, Petersen announced the company would be rescinding some recent job offers.
