Digital freight startup Convoy lays off 7% of tech workforce

Digital freight startup Convoy confirmed Friday that it is cutting 7% of its workforce in an effort to slash operating costs amid concerns about a downturn in the economy and its potential impact on the company’s customers’ businesses.

Seattle-based Convoy, which is valued at $3.8 billion, raised $260 million in new funding in mid-April with $160 million coming from a series E preferred equity round led by current investors Baillie Gifford and T. Rowe Price and $100 million in venture-debt investment coming from Hercules Capital Inc. 

“The market is not behaving normal,” a company source familiar with the layoffs told FreightWaves.

The source said the layoffs were necessary amid growing concerns about the macroeconomic conditions, including high inflation and surging energy prices.

The layoffs were first reported by GeekWire and confirmed by FreightWaves.

FreightWaves CEO Craig Fuller said many companies are going to be slashing costs where they can as freight is slowing and rates are dropping.

“I think everyone’s just going into a risk off environment because nobody knows how long and how deep a potential recession could be,” Fuller said. “Everyone’s just getting cautious.”

Since entering the freight market in 2017, Convoy works with a network of more than 400,000 trucking companies. 

Convoy expanded its business significantly during COVID when the freight market was hot, but now has had to right-size it employee count as economic conditions worsen in the industry.

“We have made a number of organizational and other operating expense related changes to ensure we are in the strongest financial position possible ahead of the potential for worsening economic conditions,” a Convoy spokesperson said in a statement. “As a result of these changes, we were sad to have to say goodbye to approximately 7% of Convoy’s workforce today. This decision was not easy, nor taken lightly. With our recent fundraise behind us and the continued intrinsic strength of our business we look forward to continuing to improve the freight industry for the betterment of truck drivers, shippers, the economy, and our environment, whatever market conditions we encounter along the way. We will be opening up our networks to support departing staff in their efforts to secure new roles.”

Source: freightwaves - Digital freight startup Convoy lays off 7% of tech workforce
Editor: Clarissa Hawes