Digital freight booking platform Freightos has announced a plan to cut 13% of its workforce in deteriorating market conditions.
The Nasdaq-listed company said letting 50 employees go is part of an operational efficiency plan aimed at reducing expenses, with the goal of adding $5.6m per year to adjusted Ebitda.
The Jerusalem-headquartered technology company, best known for containerised freight, reported an improved earnings outlook for 2023.
It now expects to report an adjusted Ebitda loss of $19.8m to $21.5m, better than the $24.4m to $21.5m in red ink forecast in May.
Chief executive Zvi Schreiber described the job cuts as a difficult decision.
“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,” he said.
“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 digitise global freight procurement for thousands of carriers, freight forwarders and importers/exporters globally.”
Despite the challenging market, Schreiber said shipping’s drive for digitalisation has led to growing revenue and transaction volume on the company’s platform.
It expects 973,000 to 1.04m transactions on its platform this year. That is lower than Freightos’ earlier guidance predicting 1.01m to 1.12m transactions in 2023, but far higher than just over 668,000 transactions last year.
Revenue is expected to come in at $20m to $21.2m, down from an earlier estimate of $21.2m to $23.1m, but more than the $19.1m pocketed in 2022.
Schreiber said the company’s operational efficiency plan allows for continued growth in its freight platform business and in its solutions division.
“We expect more modest growth in the small or midsize importer/exporter segment, where growth is more dependent on capital-intensive activity,” he said.
“Becoming a leaner, more efficient organisation, combined with continued investment in our key growth drivers, should set us up for continued success for many years to come.”
But the disclosure of the operational efficiency plan did little to soothe investors, as Freightos stock was the biggest loser among US-listed shipping shares in late-morning trading in New York.
The shares have so far shed 6.9%, reaching $3.64.
