When Flexport founder Ryan Petersen picked Amazon consumer chief Dave Clark to lead the buzzy freight forwarding and logistics startup, he noted that they needed an “entrepreneur” and a builder, not another executive.
It seems the pair had different visions for what that meant. And now, with Clark suddenly out after just one year on the job and Petersen back in the CEO saddle, it’s getting personal.
Two days after Clark’s abrupt departure as CEO, Petersen said the company will rescind dozens of employment offers and look to lease out the company’s office space as it looks to get costs under control and “get its house in order,” according to a post on the social media site X, formerly known as Twitter.
Flexport is rescinding a bunch of signed offer letters for people who were starting as soon as this Monday. I am deeply sorry to those people who were expecting to join our company and won’t be able to at this time. It’s messed up. But no way around it, we have had a hiring freeze for months I have no ideas why more than 75 people were signed to join. Or why we had over 200 open roles are on our web site. All of those have been canceled except for a handful of roles directly tied to our most important initiatives (eg improving timeliness of our freight services) A Flexport team member will reach out to each of you personally asap to explain the move. I hope you will forgive us someday and even consider coming to work here again once we get our house in order. But now would not be a good time to add more people and expenses to the company.
In a separate post, he noted that Flexport has “grade A” office space to sublease in San Francisco, Los Angeles, New York City and other locations around the world.
“We have way too much for our size–we rented space for a 2x bigger team!!” he wrote. “New official flexport real estate policy is we don’t get new office space til there’s always a line at the bathroom in the current office space.”
Petersen’s main complaints around Clark’s leadership — at least on public comments he has made — seem to center around costs, specifically hiring and expanding too quickly.
However, Clark’s hiring and big “entrepreneurial” vision for Flexport was hardly a secret. Clark was actually co-CEO alongside Petersen his first six months on the job, at least according to Petersen’s own comments in September 2022. Petersen then stepped into an executive chairman role.
And just four months ago, Flexport acquired Shopify’s logistics unit, marking a big expansion for the company that provides ocean, air, truck and rail-freight forwarding and brokerage services. Shopify received stock that represented about 13% equity interest in Flexport as part of the agreement.
Petersen even reiterated Friday that the he and the board were well aware of what Clark was doing, stating “we were on it just trusting in the growth plan which hasn’t come through.”
Flexport’s board and Petersen, once taken by Clark’s growth strategy, have become impatient and reversed course. Now it seems that curbing spending and becoming profitable — not growth at any cost — is the new strategy. Clark and some of his key hires are now out.
A lingering question is what will become of the Shopify logistics unit that was acquired earlier this year?