Freightos Reduces Headcount by 13% in Operational Efficiency Plan
Freightos is reducing its headcount by 13%, or about 50 employees, as part of its plan to cut costs and boost efficiency.
This operational efficiency plan is designed to enable the booking and payment platform for the international freight industry to continue its growth and reach break-even on funds already raised, Freightos said in a Tuesday (July 11) press release. It is expected to improve adjusted EBITDA by about $5.6 million annually.
Freightos’ success in promoting digitization in the freight industry amid a difficult economy has prompted the implementation of the new plan to ensure the company can sustain its growth, boost profitability and position itself “for sustainable success in the years ahead,” the release said.
“Despite challenging market conditions, our successful push for industry adoption of digitization has resulted in strong continued growth in total transactions and growing revenue on our Freightos platform,” Freightos CEO Zvi Schreiber said in the release. “However, given the persistently weak market conditions, we are refining our priorities to deliver on our plan to reach profitability with the capital already raised.”
The company’s plan includes streamlined operations focused on the development of solutions and platforms for freight forwarders, airlines, and importers and exporters, according to the press release.
Freightos is expecting more “modest growth” in the smaller and mid-sized importer/exporter markets due to high capital expenditure, the release said. To meet this demand, Freightos plans to become a leaner organization, utilizing its cash on hand, enabling “capital-efficient growth” of its platform and solutions businesses.
Schreiber added: “These changes will position Freightos for sustainable success in the years ahead, through cyclical downturns and upturns, as we continue to digitize global freight procurement for thousands of carriers, freight forwarders, and importers/exporters globally.”
Freightos noted in March that shipping demand was a lot different than it had been a year earlier.
In testament to the new headwinds, the company said during an earnings call that its 2023 revenues will grow by 15% to 21% year on year, where earlier management projections had pegged that growth to be near 90%.
Schreiber said during a March 13 conference call with analysts that “the industry has obviously changed beyond recognition.”
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