As COVID-19 hit the world in 2021, demand evolved and the industry raced to catch up. As a result, various companies were hired in droves throughout 2021 and the beginning of 2022. But thanks to events like the Russia-Ukraine conflict, weather woes, and inflationary pressures, these companies had to lay off many starting the 2nd half of 2022. According to a memo from co-CEOs Ryan Petersen and Dave Clark, supply chain software startup Flexport too is laying off 20% of its global workforce, or roughly 640 employees.
Flexport joins a long list of tech companies cutting jobs after going on a hiring binge during the COVID-19 pandemic, including recently announced layoffs from Amazon, Salesforce, and Coinbase. The company’s freight forwarding and brokerage services are in the cloud, enabling it to analyze costs, container efficiency, and greenhouse gas emissions quickly and more accurately than legacy systems.
Flexport topped last year’s CNBC Disruptor 50 list, as supply chain bottlenecks roiled the global economy and it raised $900 million from investors at an $8 billion valuation. But now the co-CEOs say the company is being challenged as higher interest rates around the world hit demand.
The company said layoff packages will vary by geography, but for US employees will include 12 weeks severance, 6 months extended health care, 2022 bonus payment, equity vesting acceleration including dropping the vesting cliff for those with 6 months or more of tenure, immigration support, and ability to opt-in to an alumni talent directory to help with future job opportunities.
Flexport joins a long list of tech companies cutting jobs after going on a hiring binge during the COVID-19 pandemic. Amazon said it would cut 18,000 jobs, more than the online retailer initially estimated last year, while Salesforce reduced its headcount by more than 7,000, or 10%. Coinbase announced a 20% workforce reduction as well. Elon Musk slashed about half of Twitter’s workforce after taking the helm as CEO last year, and Meta cut more than 11,000 jobs or 13%.
These big names too are not immune to the macroeconomic downturn that has impacted businesses around the world. For players like Flexport, with customer volumes reducing as a response to inflationary pressure, downsizing allows them to be agile and adaptable. With the goal to be fiscally responsible, many of these organizations choose to lay off people and stay lean. For employees, it remains to be seen how favorable the job market will be through 2023.