Thunder! Freight forwarding giant CEO resigned, nearly 100 new employees were "fired"

Founder and current CEO Ryan Petersen recently announced on social media X that he had "laid off" about 75 employees who were preparing to join the company. 

According to overseas media reports, the tone of his posts made it look a lot like Clark had gone beyond his duties - and certainly beyond his spending limit - and costs began to spiral and were clearly out of control.

Spending cuts may be timely and critical, but they are a brutal way to change course anyway. According to Petersen, "Flexport is rescinding some of the signed offers that were in place for new employees who were due to start on Monday. I feel sorry for the people who wanted to join our company but now can't. This is bad. We've had a hiring freeze for months, and I don't know why 75 people have signed on. I don't know why we have over 200 vacancies on our website."

"With the exception of a few roles directly related to our most important initiatives (e.g., improving the timeliness of freight services), all positions have been eliminated."

Perhaps, his next sentence won't soften the blow: "A member of the Flexport team will personally contact each of you as soon as possible to explain this move." I hope that one day you will forgive us and even consider working here again after we have packed up our office rooms. But now is not a good time to add more people and expenses to the company."

It was a strange contrast to a tweet he had written 22 hours earlier: "We need to make better decisions." The first is to care more about our customers, employees and shareholders. It's going to be an epic journey where everyone wins!"

But that epic journey doesn't seem to have begun, replaced by an epic race to cut spending. Petersen also appears to be auctioning off Flexport's buildings. Another tweet offered office space rental. "Flexport has Class A office space available for sublease in San Francisco, Los Angeles, New York, Dallas and around the world."

Changes are coming at the top of SAN Francisco-based freight forwarder and customs service provider Flexport, with CEO Dave Clark saying he is stepping down.

Clark joined the company in September 2022 as co-CEO alongside Flexport founder Ryan Petersen after nearly 23 years at Amazon in a variety of operational, logistics and fulfillment roles. Ryan Peterse will continue as chief executive officer after Clark's departure.

During Clark's tenure at Flexport, the company acquired the assets of Shopify Logistics, a subsidiary of multichannel commerce platform Shopify, in May, including fulfillment technology services provider Deliverr, which Shopify acquired in 2022 for $2.1 billion.

Flexport officials said at the time that the company will become the official Logistics partner of Ottawa-based Shopify, adding that with the addition of Shopify Logistics, its technology-driven platform will support businesses of all sizes by making it easy to plan, visualize, and support. And execute a global supply chain from manufacturer to customer under one unified platform.

Clark described the acquisition as "the final piece of the puzzle that allows us to drive technology-driven solutions across the entire product lifecycle, from the manufacturer's shop floor, across oceans and skies, through ports and fulfillment, and now, directly to the customer in the hand." He explained that a key driver for the acquisition of Shopify Logistics is that the shipping industry has not yet undergone the same technological revolution that other industries have undergone.

Rick Watson, founder and CEO of RRMW Business Consulting, noted in a commentary that Clark and Flexport were never a good fit. "This is a case of a virtual logistics enterprise colliding with a logistics infrastructure builder," he said. "Flexport has always been overrated. Clark found himself in a much more serious situation than he had anticipated, and he decided to quit. Flexport's new direction - freight - is a commodity that Flexport will not be able to justify in the future. 

The announcement hints that Flexport will spin off its delivery business (Deliverr) in favor of its freight business. Deliverr had just been acquired by Shopify a few months earlier, leaving Shopify without a fulfillment partner."