Flexport is undergoing a reorganization of its omnichannel business, integrating its freight forwarding and fulfillment teams.
As part of the integration, the company is cutting around 2% of its workforce due to redundancies.
While that might not sound like a large portion of its headcount compared to recent tech layoffs, keep in mind that Flexport already laid off 20% of its workforce this past January, after last year having made 20% reductions in both January and October. Flexport's headcount today sits at about 50% of what it was just over a year ago.
A Flexport spokesperson told Sourcing Journal:
“We continue to sharpen our focus on larger customers and drive down operating costs, giving us the ability to profitability scale our business and creating value for both our customers and Flexport. We have made great progress towards our growth and profitability goals in 2024, and the reorganization will enable our teams to leverage Flexport’s full suite of logistics capabilities to solve customer problems and help them grow.”
“Larger customers” — that's the dream, right? The holy grail of e-commerce success! Earlier this year, Shein partnered with Flexport as its preferred logistics partner for US operations, and I'd imagine the company wants more partnerships like that. But those partnerships take time to build.
So the question becomes — does Flexport have enough capital reserves to support its current run rate while it acquires these new larger customers?
Flexport has raised over $2.7B in funding to date, including a $260M capital infusion from Shopify earlier this year. The company doesn't disclose its financial numbers, but Sourcing Journal notes that Shopify incurred a net loss on its Flexport investment of $44M in each of the previous two reported quarters, which indicates that Flexport is still burning through cash, despite the massive layoffs.