Mass Layoffs Expected At Bezos, Gates-Backed Logistics Unicorn Convoy

Logistics startup Convoy is expected to implement mass layoffs as it reportedly halted all shipments on its marketplace amid a funding crisis.

The layoffs at Convoy are expected to be announced Thursday, Axios reported, citing sources familiar with the situation. A majority of the company's remaining 500 employees are expected to be affected by the layoffs.

"Today, we are taking several necessary steps to prepare Convoy's business for a transition that we will have more details on in the next 48 hours," a Convoy spokesperson told the outlet.

Multiple reports emerged Wednesday saying Convoy halted all shipments. It also reportedly notified its employees to prepare for a transition.

The company was hoping to sell its brokerage business arm in the coming weeks. Filing for Chapter 11 bankruptcy was possible in the future if it didn't find an acquirer, Axios reported. Convoy did not respond to International Business Times' request for comment.

The freight network connecting truckers with shippers shut down its Atlanta office and laid off some workers as part of a restructuring process in February. At the time, Convoy CEO and Co-founder Dan Lewis wrote on LinkedIn that the decision was taken due to a transition to a customer service model that will automate many tasks.

"This shift represents a big step forward in how we operate, but it comes at a cost. Increased automation and tighter focus have changed our staffing needs," he said.

Convoy reduced its workforce again in June, hitting employees at the customer experience operations unit.

Convoy raised $260 million from Hercules Capital and JP Morgan in April 2022. It said the fresh funds will enable it to "accelerate the development of its efficiency-focused technologies." Convoy was valued at $3.8 billion after the funding round.

Before the COVID-19 pandemic, Convoy grabbed the attention of some of the world's tech leaders, including Jeff Bezos and Bill Gates. Marc Benioff of Salesforce and Dropbox's Drew Houston are among its investors. In a 2019 funding round, it raised $400 million from the likes of Fidelity Management, Lone Pine Capital Baillie Gifford and Al Gore's Generation Investment Management, among others.

Several other logistics companies have implemented workforce cuts this year, including Flexport, which announced a 20% headcount reduction this week. Warehousing startup Flexe laid off 33% of its workforce last month amid a slowdown in the freight industry. The company did not reveal the exact number of affected employees. Project44 also announced the elimination of 116 jobs last month as part of a restructuring plan.