Flexport’s layoffs came as a relief for some. Former Deliverr and Shopify employees told Insider last week’s layoffs at Flexport capped the end of a multiyear rollercoaster marked by multiple complicated acquisitions and integrations, compensation issues, and culture clashes.
Many employees who had joined the freight-forwarding company with its acquisition of Shopify Logistics in May were let go in Flexport’s latest round of layoffs, which affected 20% of the company overall.
The integration of the Shopify Logistics team into Flexport had been rocky, five employees said. Some employees saw cuts to their base pay when they joined Flexport, two said. Confusion over compensation continues even now, four months after Flexport acquired the business from Shopify.
When Shopify completed its acquisition of Deliverr in July 2022, employees’ equity converted to Shopify stock on a one-to-one basis. But when Shopify sold its logistics business — which included what was formerly Deliverr — to Flexport less than a year later, Flexport converted only a percentage of some employees’ remaining equity into Flexport equity, one person said.
“If you barely had any equity left to vest, maybe they bought out the whole thing, but if you had a lot, like one to two years of vesting left, they only bought out a percentage of it,” this person, who worked at Deliverr, Shopify, then Flexport, said.
This person added that the conversion from public stock to RSUs meant that the value of their Flexport equity was less than they expected. Employees moving from Shopify to Flexport were also told they would be eligible for a bonus as part of their total compensation.
Another factor complicating matters was a new compensation structure that Shopify rolled out in September 2022, called Flex Comp. The structure allows Shopify employees to decide the percentage of their compensation they want to be made up of cash and how much of stock. Employees were required to hold a small amount of RSUs or options as part of their pay package.
But at least some who opted for the maximum amount of cash in their Shopify compensation did not receive Flexport equity when they transitioned into the company. Two former employees laid off from Flexport this month said they were told they wouldn’t have been eligible for a grant until March 2024.
Severance pay for laid-off employees varied by location, but those in the US received nine weeks of pay, CEO and founder Ryan Petersen said in a memo to workers on October 12.
A Flexport representative declined to comment for this story.
‘The move from Shopify to Flexport was a shock’
In the months before they joined Flexport, the Shopify Logistics team was still working on integrating the company’s new acquisition, Deliverr, into the Shopify organization. Soon after that acquisition was complete, the team realized integrating Deliverr with Shopify would be tough, two team members previously told Insider. For example, Shopify’s existing software and Deliverr’s were built in different coding languages and were never fully integrated. Shopify Logistics was also kept on a separate Slack workspace than the rest of the company.
About 40% of logistics staffers were laid off by Shopify before the business was sold to Flexport, two people said.
Employees told Insider that from a company culture point of view, Deliverr and Shopify were similar, as both emphasized the importance of building products together as a team. But at Flexport, they said, they found a more “top-down” way of operating.
“The move from Shopify to Flexport was a shock,” said an employee who was laid off after moving from Deliverr to Shopify and then from Shopify to Flexport.
While most former Shopify Logistics employees worked on the SMB team at Flexport, some had been moved around in reorgs in recent months.
Constant leadership changes didn’t help, either. CEO Dave Clark, who had joined Flexport from Amazon, departed suddenly in September. In his departure message, he said that Petersen wanted to return to the helm. The next day, Petersen hinted at more changes through a series of posts on X, formerly known as Twitter, saying, “Strategic Plan, Day 1: Make better decisions!” He then rescinded job offers, saying, “I have no ideas why more than 75 people were signed to join.”
Petersen also told employees that more layoffs would be on the way. Several executives, including some who joined Clark from Amazon, departed Flexport in the weeks since Petersen returned to the CEO role, the WSJ reported. Multiple senior engineering leaders who came to Flexport with its acquisition of Shopify Logistics also left the company before Clark’s surprise exit.
“The culture was so far removed from the Deliverr culture,” said one former employee who was laid off from Flexport. “I’m honestly a bit relieved that it’s over.”
Got a tip? Contact the reporter Madeline Stone at mstone@insider.com, mlstone@protonmail.com, or on the secure messaging app Signal at (646) 889-2143 using a nonwork phone.
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