End to end supply chain visibility and execution process support technology provider project44 acknowledged a workforce reduction last week.

According to published reports from Freightways and Crains Chicago Business, the headcount reduction amounts to upwards of 10 percent of this tech provider’s global workforce.

CEO Jeff McCandless indicated to Freightways that whereas in prior months high-flying logistics and freight start-ups could secure millions of equity funding very readily, private equity investors have now shifted from a focus on growth at all costs to one of a demonstrable path to profitability and scalable growth.

In November of last year, Supply Chain Matters called reader attention to project44’s securing of an additional $80 million in funding with the added participation of two global ocean container carriers. The November round valued this tech provider at $2.7 billion, an increase of 12 percent from a  Series F investment round that occurred in early 2022. We pointed out that the increased valuation was coupled with what was described as a “glide path to profitability,”  a response to a more conservative private equity investing environment that now places more emphasis on self-sustaining profitability and cash flow.

The above was reinforced by CEO McCandless in his added prediction shared with  FreightWaves that no freight tech start-up will be immune to these workforce trimming trends to assure a path toward achieving profitability, and that there would be “more FreightTech layoffs to come.”

In a prior Supply Chain Matters posting, we observed that a U.S. freight and logistics industry recession continues as the industry wants to believe that conditions will improve in the latter half of this year. Not only are various industry supply chains continually challenged with trimming excess inventories, but they are also further being pressured by senior business executives to restructure and reduce previous high levels of transportation and logistics costs from specific contracts with carriers.

Similar to the prior pandemic years, the pendulum often tends to move from boom to trim.

 

Bob Ferrari

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