Last-mile delivery firm Veho is laying off 19 percent of its corporate employees, resulting in the loss of roughly 65 jobs.
The company has not revealed which departments have been impacted by the staff reduction. The Information first reported on the layoffs Thursday, which have since been confirmed to Sourcing Journal. According to the initial report, the reductions came just a few months after it outsourced some customer service roles overseas.
“We conducted a reorganization of our corporate team to improve efficiencies, accelerate our path to profitability and be able to invest more in areas that directly impact our clients’ needs and our growth,” a company spokesperson told Sourcing Journal.
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As of Monday, LinkedIn listed that Veho has 674 associated employees.
The company, which now operates across 42 markets and services last-mile delivery and returns for businesses like Saks Fifth Avenue, Nordstrom, Stitch Fix, Rent the Runway and ThredUp, secured $295 million in two funding rounds in December 2021 and February 2022.
Last summer, Veho extended its warehousing presence into 11 new markets in the northeastern U.S., including New York, Boston and Hartford, a year after moving its headquarters from Denver to New York City.
But like many technology-driven companies in the logistics field, expansion has proven to be a bit of a money pit, which has resulted in higher losses that increasing revenue was unable to outpace. As venture capital funding has largely dried up for supply chain tech firms amid a high-interest rate environment, companies like Veho haven’t been able to offset the losses that come with rapid growth.
Nevertheless, the Veho spokesperson called the company’s capital position “very strong,” saying that the last-mile firm had a record peak season in 2023. According to The Information’s report, revenue nearly doubled at a 90 percent rate from 2022.
The company touts an on-time delivery rate of 99 percent, and uses crowdsourced gig drivers to pick up packages from the company’s facilities and deliver them to customers. The number claim remains well ahead of projections from supply chain visibility platform provider Project44, which said that 83.9 percent of last-mile shipments arrived on time in November based on their initial estimated time of arrival.
The Project44 data did outline one potential benefit for Veho going into 2024. More companies are diversifying their last-mile carriers, which could result in more business through the year. As of November, retailers and brands leverage 6.1 carriers in the last-mile delivery process, an average that has steadily increased from the 5.0 carriers on average in July 2022 and the 4.4 in November 2020.
“It’s certainly a trend that has been picked up during the pandemic and hasn’t slowed down, even when the market shifted,” Itamar Zur, CEO and co-founder of Veho, told Sourcing Journal in November. “Many brands realized during the pandemic, that if they put all the eggs in one basket that’s very risky for them, especially once UPS and FedEx jack up their rates.”
At the time, Zur said that most companies are looking for between three to five partners to give them coverage across the entire U.S., while some try to work with as many as 20 to 30. But Zur recommended against having such a large swath of partners given the complexities that come with working with small vendors in individual cities.
“Most retailers are looking for shipping providers that cover a substantial amount of the country and cover significant cities where their customer base is concentrated, particularly for e-commerce,” Zur said. “Just like Amazon’s regionalized strategies, retailers want to move things around within the region very fast—within a day or two—and sometimes within the same day. That puts them on equal footing with Amazon, and it allows them to operate on a more competitive cost basis. It also allows them to experiment with companies that are much more customer-facing and customer-focused technology enabled.”
The start of 2024 has seen its fair share of job cuts across the apparel supply chain as companies reevaluate their annual budgets. Logistics providers like GXO, Coyote Logistics and Flexe are among those that kicked off the year with layoffs, while Flexport is reportedly slashing another 20 percent of its workforce in the coming weeks on the heels of a $260 million funding round from Shopify.
These cuts, and those at Veho, fall in line with the larger transportation and warehousing industry, which endured 23,000 job losses in December, according to data from the U.S. Bureau of Labor Statistics (BLS). The sector has 100,000 fewer jobs from its peak in October 2022.
Layoffs also extend to the retailers themselves, with apparel sellers such as Macy’s, eBay and Fanatics all announcing cuts to begin 2024.
