Flexe is laying off one-third of its employees in another round of job cuts for the logistics industry.
The on-demand warehousing and fulfillment technology company joins UPS, FedEx, Amazon, GXO, DHL, Freightos, Project44, Flexport and Convoy in cutting headcount this year.
The job cuts come more than a year after Flexe raised a $119 million Series D funding round valuing the company at $1 billion.
At the time, the Seattle company said it saw rising demand for its logistics programs, despite macroeconomic uncertainty. But sagging consumer demand and a freight recession since then forced the company to cut spending.
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While Flexe help retailers and brands prepare for seasonal peaks, the dim holiday forecast means merchants might not need to use the company’s services.
Though Flexe confirmed it’s cutting 33 percent of jobs, it didn’t offer further details. According to LinkedIn, the company employs 435. The company isn’t currently hiring, according to Flexe’s website.
“We are sincerely saddened to lose such great talent,” a Flexe representative told Sourcing Journal. “Our team remains focused on serving our enterprise customers.”
Founded in 2013, Flexe saw demand rise during the Covid-19 pandemic e-commerce surge when companies wanted additional warehousing space without the long-term commitment.
Originally built as a “warehouse-as-a-service” provider to help retailers and brands enhance storage capabilities, the company’s services expanded across e-commerce fulfillment, warehouse management, order management, retail distribution and same-day delivery.
Walmart, Ralph Lauren, BJ’s Wholesale Club and Ace Hardware have used Flexe’s services. The company helps customers access less-than-truckload (LTL), parcel delivery and last-mile carrier partners.
Flexe kept costs low with an asset-light model. It doesn’t own or operate any of the warehouses in its network. Flexe claims that its logistics network halves new facility ramp-up time.
Elsewhere in logistics, Flexport laid off 20 percent of workers to start the year, and that was before CEO Dave Clark left and founder Ryan Petersen returned to the top spot. The company is refocusing on the core freight business; The Information reported that Flexport’s revenue plummeted nearly 70 percent in the first half of the year.
Supply chain visibility platform Project44 laid off 10 percent of employees, while freight booking company Freightos cut approximately 13 percent of staff. And Convoy, another digital freight platform and marketplace, axed employees in July for the fourth time in just more than a year, before reportedly weighing strategic alternatives that could include a sale or new investment.
Flexe’s job cuts also come as the logistics sector is on the downturn this year. According to the Logistics Manager’s Index (LMI), the industry saw three consecutive months of contraction from May-July, with the index itself seeing five consecutive months of all-time lows since March.
The LMI is calculated using a diffusion index. A reading above 50 indicates that logistics is expanding; below 50 means it’s shrinking.
July’s report indicated that inventory levels were down to 41.9, the steepest fall in the index’s seven-year history. Shrinking inventories led to slowing growth for warehousing utilization and increasing warehousing capacity—two areas that would directly impact Flexe’s on-demand warehousing business.
The LMI rebounded from 45.4 in July to 51.2 in August, the highest number since February’s 57.6, with the warehousing utilization and capacity trends seeing a reversal from the months prior. The August report sounded a note of caution on the index, stating “it is not yet clear whether this move back towards expansion is a one-off deviation from the contraction we had been seeing or represents a pivot back towards expansion.”
