No. 1 digital freight forwarder cuts another 20% of its workforce

According to US media, US freight forwarder Flexport is planning to lay off 20% of its workforce in the coming weeks, affecting around 500 employees.2023 In October, Flexport had already fired a fifth of its workforce. The report noted, "This marks the third round of major layoffs at the logistics startup in just over a year." 

FlyHub has faced significant challenges with declining freight rates and severe financial losses. in early January, FlyHub announced that it was deepening its relationship with longtime e-commerce partner Shopify through a $260 million financing round. In May last year, Shopify sold its logistics division, e-commerce fulfillment and last-mile delivery business to FIHB and acquired a 13% stake in FIHB, a move that not only strengthened FIHB's presence in the e-commerce logistics space, but also provided it with more room for future growth. Despite the difficult situation, Flyxibo still endeavors to seek financial support to maintain its operation.

Continuous underperformance in consecutive months forced FIHB to conduct two rounds of mass layoffs in 2023. Last January, the company laid off about 20% of its workforce globally, involving about 640 positions. However, just nine months later, the company had to carry out a second round of layoffs, resulting in the dismissal of about 20% more of its 3,300 employees, or about 600 positions being cut.

FlyHub is a freight forwarding company founded by Ryan Petersen in 2013.2023 In early September, Petersen made a surprise return to the company, replacing former CEO Dave Clark.2024 Petersen and Clark reportedly disagreed over the direction of the company and new spending, which ultimately led to Clark's departure. A former senior executive at Amazon, Clark was committed to driving the company forward after joining FlyHub. However, a philosophical disagreement with Petersen led to this high-level change.

In a report announcing the layoffs to employees last fall, Petersen explained that the layoffs were intended to help the company regain profitability and build a $1 billion net cash reserve. He added that the layoffs would provide the company with greater flexibility to re-stabilize its business without raising consumer prices.

Despite the challenges, Petersen, the founder of FlyHub, said at the end of 2023 that he expects the company to be profitable again by early 2025. This prediction provides hope for the future of FlyHub, even though the company is currently experiencing massive layoffs and financial losses.

Ryan Petersen said, "We plan to be profitable by the end of next year or throughout 2025. That's what we're working toward, and it doesn't require miracles, just good execution."

As a middleman, FIHB buys space on container ships from shipping lines and makes a profit by earning the difference between the shipping line's markup and the customer's rate. Over the past decade, FlyHub has raised $2.3 billion in investment. With this February's funding, the freight forwarder is valued at $8 billion. Despite the challenges it faces, FIBO is working hard to keep the business running and achieve its profitability goals through its strategic planning and fundraising capabilities.

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