Four months after letting go of more than 60 employees in December, digital freight startup Flock Freight, valued at over $1.3 billion, announced a second round of layoffs, affecting 45 people, or 8% of the workforce.
Twelve more employees, according to colleagues, were let go at the end of March, a claim the company disputes. The company’s co-founder and CEO, Oren Zaslansky, explained that they had to reduce headcount to compete.
PitchBook, an online resource tool for analysts, private equity, and venture capital investors, estimates that as of January 31st, Flock Freight employed over 630 people. That’s a 39% reduction in staff for the digital freight company.
Over $399 million has been invested in Flock Freight, with SoftBank Investment Advisers contributing $214.6 million in Series D capital. However, some workers complain that the company’s proprietary technology has fallen short of expectations.
This technology was supposed to offer shippers faster and cheaper cargo transport.
Flock Freight was established in 2015 and has raised over $399 million. Their Series D fundraising round, headed by SoftBank Investment Advisers, brought in an additional $214.6 million in capital.
Some workers, however, have complained that the company’s TMS technology is decades behind competing digital and traditional freight brokerages. Former Flock Freight workers claim they overheard industry heavyweights expressing dismay at the company’s persistent service issues and inability to hold on to its best shippers and carriers.
If shippers moved their freight utilizing Flock Freight’s unique technology, they would have a better option for transporting partial loads, the company claimed. Shippers were first attracted to Flock because of the company’s assurance that their goods would “never see the inside of a terminal.” In addition to eliminating theft and loss, Zaslansky claimed that truckload transit times would decrease by 25% to 50%. Flock Freight contended that it could cut greenhouse gas emissions by using its unique software to combine less than full truckloads with full ones. However, former workers claimed the company’s goal was impossible due to service issues and the current freight market.
In October, Zaslansky reportedly told employees at Flock Freight that the company was losing money and needed to transport less-than-full truckloads as full ones to make a profit.
After getting over the initial shock of being laid off, some former employees of the digital freight company claimed that it was the best thing that ever happened to them.
One former employee said, “It was a toxic dumpster fire,” working for Flock Freight.
