Flexport is laying off 20% of its workforce
cnbc.comThis isn’t great optics: https://archive.ph/pxy91
Serious question: with how much instability there is with this company, why would anyone want to work there? Are they the best in their business and just have hit a rough spot? Why is Flexport so commonly discussed here?
Flexport is commonly discussed here because it’s a ycombinator company and brands itself as a tech company.
The main reason I know Flexport exists is because up until probably a year or two ago there was constantly a Flexport is Hiring being promoted on the front page of HN. Either it’s unprecedented growth or there’s some turnover requiring that level of constant posting. Starting to uncover that it might have been the latter
> Why is Flexport so commonly discussed here?
Because they're a YC start-up https://www.ycombinator.com/companies/flexport
and their founder CEO is well-connected like other tech start-up CEOs https://www.latimes.com/business/technology/story/2021-10-28...
"Flexport is hiring" posts were popping up like weeds here on HN for a while. And they never allow comments, which I found to be highly suspicious.
"We're hiring" ads from YC companies get special placement on the front page, and (AFAIK) they always have comments turned off. Nothing nefarious about that.
I’ve been frequenting here for perhaps 5-6 years both lurking and posting and no one other company as far as I can tell has even remotely made as many “X is Hiring” posts as Flexport. Maybe Smarking. I bet it’s possible to pull numbers to prove me wrong but my memory at least says that Flexport is a specific outlier in terms of how many times they have posted vs other YC companies
I know that, but I think these hiring posts should allow comments. It is suspicious to me that they don't.
If these companies are truly as great a place to work as they claim to be, then they should be able to very easily defend that in a comment thread. The silence from a lack of discussion on these hiring posts is deafeaning.
They’re not posts, they’re native ads.
Then they should allow native comments
The rationale against YC job ads comments, FWIW: <https://news.ycombinator.com/item?id=10299432>
Otherwise, HN moderates YC and YC-company stories less:
Can it be called rationale really? Saying job ads aren't intellectually interesting is an argument against job ads. Not for blocking comments. It was a business decision obviously.
Are there comment sections on linked in jobs? Indeed?
Of course not don't be silly
Neither of those are discussion sites.
The real issue is one of expectations: those kind of job ads are shoehorned into the site’s format, but then seem out of place because they don’t offer one of the most basic and central features that this site offers.
LinkedIn is as much a discussion site as this
Presumably you can’t be referring to the constant stream of self-serving posts with all the substance of an MLM marketing pitch. So what have I missed about LinkedIn? Can you point me to an example of one of the discussions?
corporate virtue signaling is not commentary
Flexport made a large number of hiring posts on this site, so most people here have presumably heard of them.
A major competitor is Maersk Go started [0] as Twill https://maersk.com/twill. After Sanne Manders [1] in 2014 left BCG for startup Flexport, BCG went to the board of Maersk and explained them about the upcoming competitor of Damco https://maersk.com/damco. Maersk and Berlin based BCG Digital Ventures https://bcgdv.com subsequently co-founded Twill in the summer of 2016, initially in Berlin and in march 2017 moved to The Hague across the street of Damco headquarters.
[0] https://web.archive.org/web/20220807165943/https://www.twill...
why would anyone want to work there?
Because they can’t get offers elsewhere?
A colleague who had an engineering manager offer from Flexport rescinded was able to find an alternative offer in less than ~2 weeks. n=1.
Regardless of reason why someone wants to work at an org, it's likely they can find gainful employment elsewhere.
There are what seems to be weekly Ask HN posts about how someone can’t get an interview in months of trying and a bunch of people reply confirming that “things are bad right now”.
If I was laid off and been sending my resume out for the last six months without any success I’d not be picky.
Indeed, and you shouldn't be picky when you can't afford to be. But! You should also be networking and looking for your next job on day 1 at your current job. Reputation and network gets you hired, and throwing resumes into the abyss is suboptimal. If you do not have a list of former and current colleagues you could reach out to today and be confident that they could either refer you into a role or connect you to someone who can, I highly recommend fixing that over the long term. This also enables you to consistently negotiate from a position of power (another gig is your BATNA).
This is not to say you won't get hired by applying through a website career page, LinkedIn, an ATS, whatever, but having a strong network will always win vs pipeline luck. Some people are just not good at interviewing, and some are simply not a fit for the role.
There’s also monthly “who is hiring” and “who wants to be hired” these post typically have hundreds of comments. I don’t sit on the site all day but I haven’t seen the regularity of posts you’re speaking of.
I would consider working there. There is something very real and tangible about a supply chain and shipping company. It is like computers meeting one of the oldest technologies (ships) in the world, on a global scale.
Checks out. He hired a many person company guy to take over his few person company. The many person company guy tried to make the few person company a many person company. He then went to Burning Man. On hella psychedelics, he had the full realization that his tweet quality tended to zero after he decided on content marketing to pump up his Founder's Fund deal flow which should be near infinite in the first place and that his FF work is not as important as his company. So he came back from Burning Man to his company and fired the many person company guy he got and decided to take the reins and run it like he would: lean and green.
I'm positive this is what happened and you can't make me believe anything else.
Ouch, after a prior 20% cut in January.
https://www.flexport.com/blog/flexport-co-ceos-note-to-emplo...
Layoffs suck, they drain the moral when things are already hard and negative feeling. This is why it's critical to celebrate wins as often as being transparent about disappointing news.
It seems odd to use the term “departing Flexporters” as the identity of those employees who are being let go.
Missed opportunity to call them Exporters
I guess that ship has sailed
FlexPats?
That’s the name of the alumni slack (serious)
The exported
Art Vandelay?
So shopify cut its logistics to flexport, who are now cutting 20% of its company. Must be really shitty to anyone unlucky enough to go through that :(
For anyone who missed it: https://news.shopify.com/shopify-completes-sale-of-shopify-l...
https://www.freightwaves.com/news/flexport-to-launch-eastern...
The leasing or contracts on the air freight must be a bit of a problem if shopify has trimmed their business to flexport. Probably needs to free up cashflow to cover the expenses.
Wonder how the % of business shopify was for flexport.
Unfortunate, yet unsurprising. I always looked to Flexport to drive the logistics industry forward, but they are still limited by the extreme inefficiencies between ocean carriers, customs brokers, warehouses and truckers.
There’s no standardized data format that can be handed off at each step without human involvement. It would be optimal to have an algorithm handle the ocean freight, import clearance, and booking the warehouse and trucker to handle it from there.
Maersk took a shot at a standardized data system and called it quits due to limited support. But Maersk does have a platform offering realtime rates on container bookings on their own vessels, import clearance, and trucking through their platform. I believe other carriers like MSC and ONE-Line are following this approach to get their customers on board.
What’s promising is that if one major carrier does succeed with a standardized data process, they can more easily integrate it within the ocean carrier alliance that they are part of. The 3 major ocean carrier alliances control 83% of global capacity. This seems like a more straightforward way to take a stab at setting a standard for millions of containers moving worldwide. Large companies would plug in and to manage their supply chains using their logistics suite, and smaller companies would simply use the ocean carriers dashboards.
For now it appears that it’s still cheaper to hire from the worldwide supply of low paid logistics workers than it is to get everyone on a unified system.
Not really sure what you are talking about. The standardized data format, one that works from Rotterdam to the Gobi desert, is paper. These papers are standardized for sea and air freight world wide, road paper work is stanardized e.g. across Europe.
There are systems that link all those parties together, available as SaaS of the shelf, and used by giants like DHL.
What people don't see, tech only gets you that far in logistics until information disparity and people-business problems hit you.
At some point I had a good impression of Flexport (right when they were starting out). It was a bit ruined after a call with a recruiter about their tech practices, but the public news just takes the cake.
What was concerning about their tech practices?
I started to interview with them once and the recruiter kept prepping me about creating "signal" which felt weird/dehumanizing to me, so I dropped. They seem bro-ey and patriarchal.
Apparently they’ll have a billion in net cash after this change, which is over a million dollars per “departing flexporter.”
And yet the employees get a barebones 9 week severance.
Lame.
What's the logic, that if a company has cash available then it should just go to the employees?
If the money is all borrowed and meant to keep the company running, why would employees get more than is a reasonable severance package? And by the way, 9 weeks of severance on pretty good tech job salaries is far more than many are lucky enough to get, lest you live in too much of a bubble to realize.
> And by the way, 9 weeks of severance on pretty good tech job salaries is far richer than many get.
It's drastically shorter than their cohort of tech companies, which is the comparison they sell themselves as.
Between that and the rescinded offers, if they do ever make it out of this trough, they'll have a hard reputation to shake and have to pay up with signing bonuses.
Possibly. But personally, I don't think the generosity of any severance package is a deal-breaking factor in most people's decisions to work for a company or not. Or for most people getting a job offer, that the company has reneged on some recent offers -- there are far more fundamental questions than those specific actions.
It is when the ship is sinking and the remaining people are deciding if they too should jump.
People who jump ship don't get severance.
One part of my logic is that I believe all employees should be given around 3 months or more of severance for layoffs.
Just because that isn’t common practice doesn’t mean I don’t think something like 9 weeks isn’t unacceptably short.
It’s nearly impossible to get another job and receive your first paycheck within 9 weeks.
I think it’s just that little bit extra pathetic when it’s a large and successful company with revenue in the billions that can’t even find the money to round up severance to an even number of weeks.
And I am struggling to think of how applying the WARN Act to all layoff situations wouldn’t be a net benefit to most employees.
What about the other 80%? That’s what, 250k per? Not a lot of runway.
I mean, sure, if you’re assuming revenue is $0 that’s not a lot of runway.
Flexport were advertising for roles on HN a few months ago. I'm sure they come up regularly for roles?
Bit of shake up going on. Their billionaire founder is coming back into a CEO role, cleaned house at the top (of folks that came in from Amazon), and after rescinding job offers a month ago and 20% layoffs 9 months ago, they're now trimming another 20%.
Internet rando analysis: Flexport most likely surfed the COVID wave of shipping, but the new macro makes the go forward much more challenging with aggregate demand declining (you can see this in both marine and over the road shipping volume declining). Boom time->war time transition as an org, hit by both rapidly rising interest rates (cost of capital, equity valuations) at the same time as volume declines precipitously.
https://www.flexport.com/research/post-covid/
https://www.flexport.com/research/after-the-boom-evolving-e-...
https://www.flexport.com/blog/how-long-will-covid-impact-las...
https://www.freightos.com/wp-content/uploads/2023/05/FBX-Oce...
https://www.cnbc.com/2023/04/24/economy-is-in-a-freight-rece...
https://www.ccjdigital.com/economic-trends/article/15543395/...
https://talkbusiness.net/2023/02/u-s-freight-volumes-fall-to...
https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
The major red flag to me appears to be the fact that they couldn’t beat Amazon to a logistics contract with Shopify.
It seems a lot of these actions followed that failure.
Amazon and Walmart should both be able to dominate Flexport in logistics with ease. It's the foundation of what they do.
Right, but if as an independent logistics company you cannot beat Amazon for a contract with a company which has basically defined itself in opposition to Amazon, is there even a reason to exist as a company?
But is it worth it to them? Its interesting to think if or if not the margin might be so low on that part of the business that it’s worth doing in house (because failure would cost them more) but not worth doing for the competition.
Clearly the opposite was the case with AWS, but was that clear at the time? I can’t remember, if I even knew at the time.
My first thought as well, it seemed like they were constantly posting on HN for open roles.
They’re just righting the ship
do they make much money? and what sort of moat do they have?
They're a freight-forwarder branding themselves as a software company, competing with the likes of DHL, DSV and 100s of other smaller organisations. In short, they have a very viable business model, but freight forwarding is a cut-throat industry.
Oof.
Friday the 13th.
> I evaluated every role in the company and its relationship to solving important supply chain problems for our customers
And somehow that ended up with the nice round number of 20%.
"I evaluated every role in the company and its relationship to solving important supply chain problems for our customers, which made me realize that myself and the entire C-suite are useless parasites, but we have to cut costs somewhere, so ¯\_(ツ)_/¯"
The article says CFO and head of HR were also let go.
The CFO and head of HR were not let go as part of this round of layoffs, they were fired shortly after Dave Clark left. [0]
[0]https://www.cnbc.com/2023/09/27/flexport-loses-cfo-hr-chief-...
That's more of a tantrum move than a financial strategy move. It would likely have saved the company money of these two stayed on to help with the post-layoff chaos and prepare for the next round where they'd then depart and be done. That said, maybe their golden parachutes were large enough they opted to leave.