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Flexport slashes 20% of global workforce over weak 2023 volume forecast

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Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#111

Post by SilverBirch »

dakiol wrote: post #86

Perhaps I'm naive, but I think companies are doing massive layoffs these days because of some sort of "domino effect". There are companies out there who would love to lay off half their staff, but in regular times they couldn't just do it (because it wasn't a common thing, and makes them look "bad"... everyone would protest). But since nowadays every damn company is doing massive layoffs (and not unknown companies, b…

This is literally what interest rate hikes are meant to do though, and everyone plays along. You hike rates, which switches people to saving instead of spending, since no one is spending companies cut costs and downsize instead of spend for growth and hey presto, demand collapses.

In a cheap money environment you take the money and you gamble for growth, in an expensive money environment you do your best to run lean. The pain is moving between these two. The winners are the guys who did a raise at the peak and can use that cash to accelerate through the downturn, and the losers at the guys who just didn't quite get there, who now are forced into taking capital at a massively diminished valuation.

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#112

Post by grey-area »

A global recession is coming against a backdrop of the Fed raising rates, that is going to be very painful. A lot of people here don't seem to realise this is the case or are in denial. This is a bubble bursting, this is serious.

Lots of companies are laying off workers or at least freezing hiring because they anticipate earnings cratering, or are already seeing it happen. They haven't reported on it yet, but they will in the coming months. The layoffs will continue to gather pace, as will bankruptcies.

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#113

Post by icegreentea2 »

WWLink wrote: post #103
anm89 wrote: post #99

Earlier quoted context omitted.

The market right now is FAR from overheated. In fact maritime shipping is collapsing right now. https://www.drewry.co.uk/supply-chain-advisors/supply-chain-... Both volume and rates are down roughly 80% YOY.

That the companies are so sensitive to spikes and valleys in the market speaks louder about how badly run the companies are than anything else.

How would you better run transport/logistics company to not be as sensitive to spikes and valleys as a typical current transport/logistics company?

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#114

Post by anm89 »

blacklight wrote: post #66
brianwawok wrote: post #55

Earlier quoted context omitted.

Only a 4 minute uncertainty window seems ok to me? If you were CEO how would you lay off 20% of your company?

Probably I wouldn't lay off 20% of my staff at all, unless I was really sailing in stormy waters with no way out. And Flexport isn't: there's been a slight dip in global supply chains caused by the uncertainty in China, but nothing so dramatic nor permanent that you should run and fire 1/5 of your staff - you only do that if something happens like China attacking Taiwan, and you know that for years to come trade won'…

Funny how 99% of message board participants are sure they would never do layoffs but 99% of CEOs actually do them

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#115

Post by alsfjslkdfgj »

anm89 wrote: post #99
crote wrote: post #89

Wow, that's a huge surprise. I hadn't heard of Flexport before, but they seem to be focused on global shipping. The company I work for ships almost all of its products internationally, and we have seen a massive price hike over the last 2-3 years. Some of it necessary due to rising costs, but we know for a fact that larger-volume customers are still getting lower prices. Additionally, the well-known carriers still of…

The market right now is FAR from overheated. In fact maritime shipping is collapsing right now. https://www.drewry.co.uk/supply-chain-advisors/supply-chain-... Both volume and rates are down roughly 80% YOY.

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Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#116

Post by thwayunion »

PragmaticPulp wrote: post #87
willcipriano wrote: post #25

Remember when everyone cut jobs and canceled orders at the beginning of the pandemic and it really bit them? I'm like 49% sure that's going to happen again. Something funny is in the air.

I would agree with you, except for the fact that hiring was completely out of control during 2021-2022 Taking Amazon for example, look at this chart: https://www.statista.com/chart/7581/amazons-global-workforce... Amazon's headcount literally doubled from 2019 to 2021. The recent layoffs barely move their headcount back at all. While Amazon may be the most visible, this pattern was repeated across a lot of smaller co…

> Amazon's headcount literally doubled from 2019 to 2021.

What you're leaving out is that Amazon's net sales literally doubled between 2019 and 2021, from $280MM to $470MM. The doubling of headcount over that period was perfectly rational and in-line with its business model.

There was definitely irrational exuberance in hiring during 2021-2022. But Amazon's exuberance was far more rational than most of tech. Ironically, Amazon both hired far more than everyone else and also over-hired less than everyone else. Unlike all of the other FAANG++ companies, Amazon is and always has been a low margin and labor intensive business.

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#117

Post by dougSF70 »

lmm wrote: post #65
marcosdumay wrote: post #51

Earlier quoted context omitted.

Do you expect easy money to come back? Nearly all of the companies laying people off are the unsustainable ones. I can imagine a lot of companies struggling to hire in a few months. But I can't imagine they being the same ones that are just firing.

I think easy money is coming back. There's still a bunch of wealth that doesn't know anywhere to find returns, that hasn't changed.

But with inflation driving up interest rates, that wealth will appreciate sitting as cash.

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#118

Post by warent »

grey-area wrote: post #112

A global recession is coming against a backdrop of the Fed raising rates, that is going to be very painful. A lot of people here don't seem to realise this is the case or are in denial. This is a bubble bursting, this is serious. Lots of companies are laying off workers or at least freezing hiring because they anticipate earnings cratering, or are already seeing it happen. They haven't reported on it yet, but they wi…

EDIT: Thank you all for generously sharing your time in writing up such thoughtful answers.

--

Would love to hear more on your perspective / insight.

This is all intentional, right? My understanding is that the fed is leaning into this particularly hard in order to dislodge the stubborn housing bubble.

For an individual (someone who isn't a current business owner), does this basically mean we should continue stockpiling savings, and avoid moving (rent) / avoid buying house / buying a car?

Any ideas how long this could last / what the bottom looks like?

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#119

Post by makestuff »

kyllo wrote: post #84
makestuff wrote: post #67

Earlier quoted context omitted.

My roommate worked at a freight forwarder, but from what he told me, the entire thing is a mess of excel spreadsheets and highly inefficient. I think the pitch of flexport is what if we modernize the technology and make it more efficient by reducing or removing the need of all of these people managing the forwarding via excel.

I think part of the problem with that pitch is that the cost of an IT integration in this industry could pay for a lot of people in Asia to manage a forwarding operation in Excel. Ocean carriers don't have like, APIs. It's all custom integrations with EDI, SOAP, or CSV-over-FTP and you have to have a lot of tedious meetings with them to figure out how to map out and interpret the data they can send and receive.

Yeah they also don't really have an incentive to integrate with flexport because even though it is a PITA you really only have a few options to ship freight across the ocean.

Re: Flexport slashes 20% of global workforce over weak 2023 volume forecast

#120

Post by alsfjslkdfgj »

dakiol wrote: post #86

Perhaps I'm naive, but I think companies are doing massive layoffs these days because of some sort of "domino effect". There are companies out there who would love to lay off half their staff, but in regular times they couldn't just do it (because it wasn't a common thing, and makes them look "bad"... everyone would protest). But since nowadays every damn company is doing massive layoffs (and not unknown companies, b…

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