Ex-Shopify and Deliverr workers say layoffs, compensation issues at Flexport capped a 15-month rollercoaster: ‘Honestly a bit relieved that it’s over’

  • Flexport’s layoffs came as a relief to some workers who had experienced multiple acquisitions.
  • Workers said they lost pay when they were transferred from Shopify to Flexport.
  • A number of executives have left Flexport in recent weeks, including former CEO Dave Clark.

Some people were relieved by Flexport’s layoffs. Former Deliverr and Shopify employees told Insider that last week’s Flexport layoffs marked the end of a multiyear rollercoaster that included multiple complicated acquisitions and integrations, compensation issues, and culture clashes.

Many employees who had joined the freight-forwarding company as a result of its May acquisition of Shopify Logistics were laid off in Flexport’s most recent round of layoffs, which affected 20% of the company overall.

According to five employees, the integration of the Shopify Logistics team into Flexport was difficult. According to two employees, when they joined Flexport, some of their base pay was reduced. Even four months after Flexport purchased the business from Shopify, there is still confusion about compensation.

When Shopify completed its acquisition of Deliverr in July 2022, employees’ equity was converted one-to-one to Shopify stock. However, when Shopify sold its logistics business to Flexport less than a year later, Flexport only converted a percentage of some employees’ remaining equity into Flexport equity, according to one source.

“If you had barely 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,” said this person, who previously worked at Deliverr, Shopify, and Flexport.

This person also stated that the conversion from public stock to RSUs reduced the value of their Flexport equity. Employees who transferred from Shopify to Flexport were also informed that they would be eligible for a bonus as part of their overall compensation.

Another factor complicating matters was a new compensation structure called Flex Comp, which Shopify introduced in September 2022. The structure allows Shopify employees to choose how much of their compensation should be cash and how much should be stock. As part of their pay package, employees were required to hold a small number of RSUs or options.

However, some Shopify employees who chose the maximum amount of cash in their compensation did not receive Flexport equity when they joined the company. Two former Flexport employees who were laid off earlier this month said they were told they wouldn’t be eligible for a grant until March 2024.

Severance pay for laid-off employees varied by location, but those in the United States received nine weeks of pay, according to CEO and founder Ryan Petersen in an October 12 memo to employees.

A Flexport spokesperson declined to comment for this article.

‘The transition from Shopify to Flexport was unexpected.’

The Shopify Logistics team was still working on integrating the company’s new acquisition, Deliverr, into the Shopify organization in the months before they joined Flexport. The team quickly realized that integrating Deliverr with Shopify would be difficult, two team members previously told Insider. Shopify’s existing software and Deliverr’s, for example, were built in different coding languages and were never fully integrated. Shopify Logistics was also kept separate from the rest of the company on Slack.

According to two sources, Shopify laid off approximately 40% of its logistics employees before selling the company to Flexport.

Employees told Insider that Deliverr and Shopify had similar company cultures in that both emphasized the importance of creating products as a team. However, they claimed that at Flexport, they discovered a more “top-down” method of operation.

“The transition from Shopify to Flexport was jarring,” said one employee who was laid off after switching from Deliverr to Shopify and then to Flexport.

While the majority of former Shopify Logistics employees worked on the SMB team at Flexport, some had been reorganized in recent months.

Constant leadership changes also did not help. Flexport’s CEO, Dave Clark, left abruptly in September after joining the company from Amazon. He stated in his departure message that Petersen wished to return to the helm. The following day, Petersen hinted at more changes in a series of posts on X, formerly known as Twitter, with the caption, “Strategic Plan, Day 1: Make better decisions!” He then rescinded job offers, saying, “I have no idea why over 75 people signed up to join.”

Petersen also informed employees that additional layoffs were on the way. Several executives, including some who joined Clark from Amazon, have left Flexport in the weeks since Petersen’s return to the CEO role, according to the Wall Street Journal. Before Clark’s surprise departure, several senior engineering leaders who joined Flexport as part of its acquisition of Shopify Logistics left the company.

“The culture was so far removed from the Deliverr culture,” said one former Flexport employee. “I’m honestly a bit relieved that it’s over.”

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