On demand warehousing and logistics services Cloud platform provider Flexe has initiated a layoff reportedly involving upwards of a third of its workforce.
GeekWire noted that that the company’s former CTO stepped down in January.
Founded in 2013, this asset light start-up’s unique service offering for providing online retailers flexible, on-demand warehousing capability coupled with logistics and services provided added buzz to the logistics technology start-up news cycle.
Various reports cite the Puget Sound Business Journal and a company statement indicating that layoffs were necessary “to stay ahead of the changing economic environment that most logistics businesses are experiencing.”
In July of last year, this column profiled the completion of the company’s Series D $119 million funding round pegged at a $1 billion valuation and headlined as another start-up achieving unicorn status. Reportedly at the time, total raised capital had been $265 million. Further, it was reported that six of the ten largest retailers and four of the five largest consumer packaged goods companies worked with this technology provider to run programmatic logistics as part of their supply chain strategies.
Supply Chain Matters has been highlighting the rather significant volumes of dollar investments that have been made in advanced technology start-ups focused on solving overall visibility and added efficiency needs in the under-served logistics and transportation business processes. With this lucrative funding came the desire to hire the brightest minds in technology, artificial intelligence and advanced analytics.
The result now seems to be a lot of talented people now seeking other opportunities.
In prior postings we highlighted ongoing senior leadership departures and restructuring efforts involving Flexport, along with a prior announcement that freight technology start-up Convoy was exploring strategic options.
The ongoing dramatic cutback in logistics and freight activity volumes reached an all time low in May of this year. That continues to impact logistics industry services providers and their financial performance. It hinders their inclination to make broad technology decisions. Rather, they are focusing on technology investments that provide modular, more flexible automation of owned facilities and of labor in the form of mobility focused robotics.
Our research arm’s 2023 Predictions Advisory report published in January predicted that businesses would continue to invest in supply chain digital transformation and technology enablement, but in a more prioritized focus. This implies cost reductions in the light of industry volume declines and the need to prioritize where technology provided the most impact to the bottom line.
Thus far, that prediction is playing out and with that, there is sense that a logistics tech industry consolidation remains underway.
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