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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

#81

Post by adamsmith143 »

brianwawok wrote: post #76
blacklight wrote: post #66

Earlier quoted context omitted.

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'…

The "I would never do X" is a classic response of someone who hasn't had to be there and do that. I suspect if you ever make it to that position, you will reach a point where you either have to do a big layoff - or your company will fold. So it's rather likely that you will fold, and no longer be a CEO.

If you think any of the companies that have done big layoffs needed to do so in order to survive I don't think you are paying attention to their fundamentals.

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

#83

Post by secondcoming »

iab wrote: post #18
akavi wrote: post #16

Earlier quoted context omitted.

YC-funded freight forwarding company. Basic thesis is by using tech, you can dramatically lower the labor costs of forwarding, and since freight forwarding has huge returns to scale, the benefits compound. They raised 2 G$ from 2019-2022, and their CEO used that warchest to expand counter-cyclically through the pandemic. TBD if either of the two theses pan out. Freight forwarding itself is the industry of coordinatin…

They raised two gillion??

2 Gigadollars.

For wages that's 1000^3, for taxes it's 1024^3.

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

#84

Post by kyllo »

makestuff wrote: post #67
bambax wrote: post #39

Earlier quoted context omitted.

> Basic thesis is by using tech, you can dramatically lower the labor costs of forwarding, and since freight forwarding has huge returns to scale, the benefits compound Is this remotely true though? Aren't the main costs of forwarding simply fuel? At some point I was importing goods from China (really small volume though) and I did ask them for a quote, and they were twice the price what the Chinese factory could get…

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.

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

#85

Post by calr »

In my mind, Flexport is part of the "real" economy of moving atoms. They don't fall into the more fluffy "we are a startup that helps other startups start-up". I wonder if this is an early sign for a rough recession that spills outside of the current VC-backed tech slowdown.

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

#86

Post by dakiol »

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, but companies like Twitter, Facebook, Google, etc.) then they take advantage of the situation and proceed to do the same.

> While we are looking forward to what’s to come in 2023, we must also make hard decisions necessary to set us up for long-term success.

This could have been said any damn year in the past, but massive layoffs is the latest trend, so why not.

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

#87

Post by PragmaticPulp »

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 companies. Even my employer was setting arbitrary goals to grow headcount by certain numbers last year and hired a lot of people with questionable qualifications in the process. Now they're laying people off and using it as an opportunity to cut their mistakes.

A lot of good people are getting laid off, but I have a feeling that many of these layoffs are an overdue correction from companies that were too afraid to let anyone go in the past few years. Now that the hiring market has changed to give employers the upper hand, it's only natural for them to start wanting to cut underperforming employees and focus on the people doing most of the work.

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

#88

Post by bambax »

DavidPeiffer wrote: post #61
bambax wrote: post #39

Earlier quoted context omitted.

> Basic thesis is by using tech, you can dramatically lower the labor costs of forwarding, and since freight forwarding has huge returns to scale, the benefits compound Is this remotely true though? Aren't the main costs of forwarding simply fuel? At some point I was importing goods from China (really small volume though) and I did ask them for a quote, and they were twice the price what the Chinese factory could get…

Not who you responded to, but I've listened to a number of interviews from the former CEO (highly recommend the Odd Lots podcast for his interviews and many other supply chain related conversations). A couple concepts, some details may be a bit off and I'm very open to correction. There is a lot of administrative cost. IIRC, you might have something like 1 dispatcher for every 50 drivers. You have other people giving…

There was an article I think on HN a couple of days ago, wondering why Uber and Lyft still couldn't turn a profit after all these years, while cab companies are still around and thriving, and wondering where all the money went.

Isn't it possible that tech simply overpromised, and that a couple of guys here and there smoking, typing numbers in spreadsheets on old computers, yelling over the phone and writing things down on post-it notes are simply cheaper and just as "efficient" as an army of AWS EC2 instances spilling out logs on S3 under the supervision of highly-paid engineers and dev op guys?

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

#89

Post by crote »

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 offer incredibly poor service - most notably when it comes to tracking shipments and providing proper updates. This seems to be exactly the market Flexport wants to tackle.

If they can't even compete in the current overheated market, something must be going seriously wrong at their end.

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

#90

Post by WWLink »

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…

> Now that the hiring market has changed to give employers the upper hand, it's only natural for them to start wanting to cut underperforming employees and focus on the people doing most of the work.

That reeks of "I'm so sorry but with the tough financial times right now, we have to run a skeleton crew, so we won't be able to approve any of your PTO requests and we're expecting you to work long hours for the forseeable future"

Then later at the earnings meeting: "We made record profits this quarter! The CEO is getting a giant ass bonus!"

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