SF tech company Flexport has hundreds more layoffs after week of drama

San Francisco-based Flexport is having a tough year financially, and the drama is hitting Bay Area workers yet again.

The massive logistics tech startup took advantage of a pandemic-era boom in shipping costs to raise hundreds of millions of dollars but is struggling to live up to that billing. In just a single week in September, Flexport ousted its high-profile chief executive, cut his team of industry veterans and rescinded job offers with just days of notice.

Now, barely a month later, Flexport has announced hundreds of layoffs.

These decisions fell to the founder and CEO of Flexport, Ryan Petersen, who regained control of the company in a September takeover. Petersen, a UC Berkeley alum, started Flexport in 2013. The firm advertises its core product as a platform for connecting the entire supply chain — an endeavor that became particularly lucrative during the pandemic, when shipping costs skyrocketed. Flexport pulled in a $935 million fundraising round in early 2022, led by tech stalwart Andreessen Horowitz; the round boosted Flexport’s valuation to $8 billion and its total fundraising to $2.3 billion, CNBC reported.

A few months later, the firm hired Dave Clark, a 23-year veteran of Amazon who had built up the tech giant’s logistics and fulfillment businesses into one of the world’s largest delivery systems. Petersen, in a note at the time, wrote that Clark had done “legendary” work and that his taking over as CEO ensured that Flexport would “live up to our potential.” 

But the good vibes wouldn’t last. After scaling up the firm to over 3,000 employees during the pandemic, Flexport laid off about a fifth of its staff in January and then bought Shopify’s logistics arm in May. According to the Information, Flexport’s revenue dropped nearly 70% in the first half of 2023.

Meanwhile, as had been planned since Clark’s addition, Petersen bowed out after a spell as co-CEO, leaving Clark to steer the unprofitable company alone.

After about six months, on Sept. 6, Petersen and Clark met to talk — sort of. Clark was blindsided, according to a report from the Information, when Petersen was joined by a Flexport board member on the call. The pair told Clark his choices were to resign immediately or get fired by the board the next day.

Clark announced his resignation on X, formerly known as Twitter, that afternoon, writing that he was proud of his work but that “founders have the right to change their mind.”

Petersen was back on as CEO. Early the next morning, he posted on X: “Strategic Plan, Day 1: Make better decisions!” The day after that, he posted that he was rescinding dozens of offer letters, some for employees who were due to start just a few days later; he apologized but said there was “no way around it” and that he hoped the would-be employees would forgive Flexport “someday.” Then he announced a plan to sublease several offices, including one in San Francisco.

Petersen also fired at least five of Clark’s top lieutenants, all of whom had worked with Clark at Amazon, according to the Information.

Now, about a month later, Petersen’s return to Flexport leadership has reached a familiar and brutal point: another layoff round. The CEO announced yet another 20% job cut in a blog post Thursday and wrote that layoffs would start Friday, with nine weeks of severance pay for American employees — less than many other tech firms have provided this year.

By midday, engineers and designers were flocking to LinkedIn to post their personal goodbyes to Flexport and their former colleagues.

Hear of anything happening at Flexport or another tech company? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.