Logistics Company Flexport To Cut 20% Of Global Workforce A Month After CEO's Exit

Flexport has decided to reduce its global headcount by around 20% a month after founder Ryan Petersen returned as CEO of the company following the abrupt ouster of Dave Clark.

Petersen said the supply chain management company will begin the layoffs process Friday as Flexport seeks to "get back to profitability without raising prices or placing our fortress balance sheet at risk," according to a note sent to employees Thursday.

The logistics company has more than 3,500 employees, data from Pitchbook showed. It is unclear how many workers will be affected by the layoffs. Flexport did not immediately respond to International Business Times' request for comment.

Petersen noted that support for departing employees will vary depending on their locations. Those in the U.S. will receive nine weeks of severance pay, two months of extended healthcare through the end of 2023 and immigration support. Affected employees outside the United States will get notifications about severance packages by next week.

Flexport will also maintain a team of recruiters who will work with more than 300 companies that expressed interest in hiring the affected workers.

The CEO believes the restructuring would put Flexport "in a great position" to get back to profitability "as soon as the end of next year."

The layoffs announcement came a month after Petersen returned to the CEO's position following the sudden ousting of Clark in September. Petersen publicly claimed that Clark, who worked for 23 years at tech giant Amazon, overhired and spent too much during his one-year tenure as Flexport CEO.

Clark and Petersen reportedly had some differences that ultimately led to the former's departure. Clark allegedly burned through cash and kept some key financials from Petersen, causing him to lose trust in his hand-picked successor, CNBC reported, citing sources close to the CEO. However, internal documents seen by the outlet contradicted the claims. The documents suggested that Clark worked closely with Petersen and the Flexport board to implement business decisions.

A Flexport spokesperson rejected questions about whether Clark's alleged financial mismanagement was only put forth to justify Petersen's return. "Ryan Petersen returned as CEO in order to restore Flexport's culture of customer engagement," and drive the growth and cost discipline required to return the company to profitability," the spokesperson told CNBC.

Following the CNBC report, Clark took to X, saying the company had already "missed cost, margin, and revenue forecasts for multiple quarters" before he joined Flexport.

"Although the problems at Flexport were much more extensive than I thought they would be when I agreed to join, I've never shied away from a challenge," he said. "Flexport is facing serious internal and industry challenges that require serious leadership, and I sincerely hope they find a successful path."

Petersen founded Flexport in 2013 and raised more than $2 billion from some of the world's biggest investors, including SoftBank and Andreessen Horowitz.