Freightos to cut back on staff
13 / 07 / 2023
Photo: Number1411/ Shutterstock
Freight booking and payment platform Freightos is undertaking cost-saving measures including an “approximately 13% headcount reduction”.
The Israel-headquartered company did not specify what other cost initiatives would be taken, but said that the measures are part of a new plan for operational efficiency that is expected to reduce expenses and improve adjusted operating earnings by approximately $5.6m per year.
The reduction in headcount equates to around 50 employees, the company said.
The operational efficiency plan seeks to enable the company to continue growth and to reach break-even on existing funds, said Freightos.
Growth plans include a focus on platform developments for freight forwarders, airlines and enterprise importers/exporters.
“Despite challenging market conditions, our successful push for industry adoption of digitisation has resulted in strong continued growth in total transactions and growing revenue on our Freightos platform,” said Zvi Schreiber, chief executive of Freightos.
“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. This includes efficiency measures that should keep us on the path to long-term, sustainable growth.
“Unfortunately, these measures also include making the difficult decision to reduce headcount by approximately 50 employees, or about 13% of the team. Despite the tough decision to part with teammates, I am confident that 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.”
“We believe that this plan will enable us to reach positive free cash flow on existing cash reserves as planned, despite a tougher market,” said Ran Shalev, chief financial officer of Freightos. “As a result of the changes, we are reducing our operating loss and raising our FY 2023 Adjusted EBITDA outlook on lower forecasted revenue, remaining on track to build and scale Freightos as a profitable, sustainable company.”
“This plan allows for continued rapid and capital-efficient growth of our Platform business for carriers, freight forwarders and enterprise importers/exporters, as well as continued growth of our profitable Solutions business,” Shalev continued.
“We expect more modest growth in the small or midsize importer/exporter segment, where growth is more dependent on capital intensive activity. Becoming a leaner, more efficient organization, combined with continued investment in our key growth drivers, should set us up for continued success for many years to come.”
Freightos saw its online transactions grow rapidly in the first quarter of this year, but the company registered a net loss of $49.3m, largely down to a one-time non-cash share listing charge of $46.7m incurred upon the business combination with Gesher I Acquisition Corp.
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