Flexport, a logistics company, is reportedly planning to lay off around 20% of its workforce in the next few weeks, following similar cuts in October. This comes despite the recent announcement of an additional $260 million in funding from Shopify. The potential layoffs at Flexport reflect a broader trend of job cuts in the tech industry, with giants and startups alike eliminating tens of thousands of jobs in January.
U.S. logistics startup Flexport is set to lay off around 20% of its workforce, following previous reports of a potential 30% reduction after a CEO change in October. The company, valued at $8 billion with $2.3 billion in funding, had acquired Shopify Logistics under its former CEO, expanding its services but prompting concerns about profitability and costs.
Flexport, a logistics startup, is set to lay off nearly 20% of its workforce, amounting to several hundred roles, marking its third major round of cuts in just over a year, despite recently securing $260 million from Shopify.
Flexport secures a $260 million investment from Shopify, while former Lordstown Motors founder Steve Burns launches a new EV startup called LandX Motors. Other notable funding deals include Electra, International Battery Company, Land Moto, and Lightship. In the world of electric vehicles, Fisker's Ocean SUV is under investigation, GM recalls electric delivery vans, and Kia's new EV9 SUV receives mixed reviews for its driving experience and interior design. Amazon's Industrial Innovation Fund is expanding its focus to Asia and Europe, and Uber shuts down alcohol delivery service Drizly. Wing, the drone-powered delivery company, plans to introduce a larger craft for heavier packages, and TuSimple will delist itself from the Nasdaq stock exchange as it exits the U.S. market.
Flexport, a supply chain software startup, is planning to lay off approximately 20% of its global workforce as part of a new round of layoffs. The CEO, Ryan Petersen, sent a memo to employees informing them of the job cuts, with notifications to be sent via email starting Friday. The layoffs come amidst recent turmoil at the company, following Petersen's return as CEO and his subsequent overhaul of the company's top ranks. Employees in the US and Canada will work from home on Friday, while those in Asia will be contacted about the layoffs on Monday.
Flexport, the supply chain software startup, has fired its CFO Kenny Wagers and seen its HR chief Jennifer Boden resign, just weeks after the sudden ouster of CEO Dave Clark. Stuart Leung, head of finance, is expected to be named as the new CFO. Flexport founder Ryan Petersen, who returned as CEO, has been restructuring the company and has fired several executives recruited by Clark. Flexport, valued at $8 billion, has faced challenges due to the global economic downturn and is now in cost-cutting mode, with more layoffs expected.
KeyBanc analyst Josh Beck has raised Shopify's EBIT forecasts and increased the price target to $65 from $55, citing the recently-inked Flexport deal as likely to boost merchant fulfillment options and sharpen the core focus of Shopify. The analyst also believes that Shopify's cloud-based, mobile-centric platform is well-positioned to capitalize on the m-com wave, given an impressive innovation velocity and vibrant partner ecosystem. The company is expected to benefit from increased payment penetration in non-core geographies, which is likely to propel Merchant Solutions revenue growth.
Shopify is selling its logistics-fulfillment operations, including Deliverr and 6 River Systems, to Flexport and Ocado Group, respectively. The move will allow Flexport to compete with Amazon for retailer business. As part of the deal, Shopify will lay off 20% of its workforce.
Shopify has laid off 20% of its staff and sold its logistics business to Flexport. Microsoft is planning to add AI features to Bing. Pando, a startup developing fulfillment management technologies, raised $30 million in a Series B round. Tellus, an Andreessen Horowitz-backed fintech company, is under scrutiny by the U.S. government. Paris Heymann, partner at Index Ventures, shares formulas for calculating gross dollar retention and net dollar retention, KPIs that provide deep insights into the health of SaaS businesses.
Shopify's stock surged after the company announced it will sell its logistics business to Flexport and cut 20% of its workforce to streamline operations. The company also posted a surprise profit in its first quarter, with adjusted earnings of 1 cent a share and sales of $1.5 billion, up 25% from the year-ago quarter. Shopify's move to exit logistics has relieved investors' concerns about the capital requirements of building a logistics network and potential impact on margins.
Shopify is laying off 20% of its workforce, impacting over 2,000 people, and selling its logistics business to Flexport for roughly 13% in stock. The move is part of the company's effort to focus on its core e-commerce software for online retailers and the burgeoning AI revolution. The impacted employees will receive a minimum of 16 weeks severance pay, plus an additional week for every year served at Shopify, and medical benefits for that same duration.
Shopify is selling its logistics unit, which includes last-mile delivery startup Deliverr, to supply chain technology company Flexport. As part of the agreement, Shopify will receive stock that represents a roughly 13% equity interest in Flexport. Shopify and Flexport are deepening their alliance as Shopify seeks to compete with e-commerce rivals such as Amazon and Walmart. Flexport will be Shopify's official logistics provider, and a preferred partner for its "Shop Promise," a badge displayed on Shopify merchants' listings that guarantees next- and two-day delivery, similar to Amazon's Prime delivery promise.
