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LOS ANGELES (Reuters) – Logistics startup Flexport on Wednesday said it would cut about 20% of its global workforce as its new chief executive refocuses the business amid a sharp downturn in shipping activity.
“Lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, means we are overstaffed in a variety of roles across the company,” Flexport said in a message to employees.
The privately held company, which is one of the most valuable logistics startups after raising more than $2 billion in funding, declined to say the number of employees affected by the layoffs. Data aggregation firms say Flexport employs at least 3,000 people, which would result in at least 600 layoffs.
Flexport is a fully-licensed freight forwarder, meaning it manages end-to-end sea, air, rail and road freight shipments. Its competitors include Kuehne + Nagel, DHL and United Parcel Service (NYSE:UPS).
Its move comes at a time when transportation and technology companies, as well as venture capital-backed startups, are either freezing hiring or laying off employees as global recession threatens.
Flexport’s leaving package for U.S. workers includes 12 weeks severance, six months extended healthcare and accelerated equity vesting, Flexport said.
The company also said its plan to add about 400 engineers to double its technical team in 2023 remained intact.
That move was spearheaded by Dave Clark who joined Flexport in September as co-chief executive after two decades at Amazon.com (NASDAQ:AMZN).
“The current slowdown in volume gives us time to focus on building our technology bench while the economy lags,” Flexport said.
