Flexport Inc. and Carta Inc., two startups that received valuations in excess of $7 billion following their most recent funding rounds, are reducing their headcount.
Flexport, which provides a cloud-based logistics platform, will let go 20% of its workforce or about 640 employees. Co-Chief Executive Officers Dave Clark and Ryan Petersen announced the move in a memo released this morning.
“We are overall in a good position, but are not immune to the macroeconomic downturn that has impacted businesses around the world,” Clark and Petersen wrote in the memo. “Our customers have been impacted by these challenging conditions, resulting in a reduction to our volume forecasts through 2023. Lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, means we are overstaffed in a variety of roles across the company.”
The company provides a logistics platform that companies use to order merchandise from suppliers. The platform also provides features for managing how merchandise is shipped. Companies using it can have goods shipped via trucks, cargo planes and container ships, as well as monitor deliveries to detect potential delays.
Flexport says it helped companies ship nearly $19 billion worth of merchandise in 2021. Last February, the startup raised a $935 million late-stage investment led by Andreessen Horowitz and MSD Partners. The investment valued it at more than $8 billion.
The company will provide several types of support to employees affected by the layoffs. In the U.S., it will provide 12 weeks of severance pay, six months of extended healthcare coverage, bonus payments, equity vesting acceleration, immigration support and access to an internal talent directory with job opportunities.
Following the layoffs, it plans to continue investing in growth initiatives. “At Flexport, 2023 is going to bring extraordinary velocity – we are in the process of doubling our software engineering talent and moving to single threaded business organizations to build world class products faster,” Clark and Petersen wrote.
Carta, another venture-backed enterprise software startup, is also reducing its headcount. An internal memo obtained by TechCrunch today indicates that the startup is letting go 10% of its workforce or about 200 employees.
Affected employees will receive two and a half months of severance pay. Carta will also provide one additional week of severance pay for every year spent at the startup, immigration support and extended mental healthcare services. According to TechCrunch, employees not affected by the job cuts have the option to voluntarily resign with a severance package.
The company provides a cloud platform that startups use to manage their cap tables. A cap table is a document that describes how many shares have been purchased by each investor in a startup and includes related financial data. It also offers a number of other features, including a collection of tools that venture capital firms can use to manage their funds.
Carta has raised about $1.1 billion from investors since launch. In August 2021, it closed a $500 million funding round led by Silver Lake that valued it at $7.4 billion. It says its platform is used by more than 30,000 companies including about 5,000 investment firms.
Carta and Flexport join the growing number of tech firms that have reduced their headcount in recent months. Last week, Salesforce Inc. and Vimeo Inc. also announced job cuts.