Flexe, a warehousing and logistics start-up that reached a $1 billion valuation last year, has announced a massive layoff of 38% of its workforce amid a slowdown in the freight industry. This is the second round of cuts for the Seattle-based company, which previously laid off 33% of its staff in September 2023.
Background
Flexe was founded in 2013 and offers on-demand warehousing space and fulfillment services for online retailers. The company raised a $119 million Series D round in 2022, becoming one of the rare “unicorns” in the Seattle tech scene. The company’s growth was fueled by a pandemic-driven surge in e-commerce and higher freight volumes.
However, the company faced headwinds in 2023 as the freight market cooled down and competition increased. Flexe’s rivals include Flexport, a freight forwarding giant that also laid off 20% of its workforce in January 2024, and Convoy, a digital trucking marketplace that reached a $3.8 billion valuation in 2022 but has since cut staff several times.
Impact
Flexe’s layoff affects 99 workers, according to a filing in Washington state. The company did not disclose its current headcount, but it had more than 400 employees, according to LinkedIn. Flexe’s CEO and co-founder Karl Siebrecht said in a statement that the company remains committed to supporting its departing employees and to continuing to provide world-class service to its customers.
Flexe’s layoff is another sign of the challenges facing the logistics start-up sector, which has seen a wave of consolidation and cost-cutting in recent months. The broader tech downturn has also impacted many start-ups across various industries, as venture capitalists become more cautious about investing in unprofitable businesses.
Conclusion
Flexe, once a shining star in the Seattle tech ecosystem, has slashed its workforce by more than half in less than a year, as the company struggles to adapt to a changing market. The company’s future prospects remain uncertain, as it faces competition from both established players and new entrants in the logistics space. Flexe’s layoff is a reminder of the risks and uncertainties involved in building and scaling a start-up, especially in a volatile and competitive industry.
