Flexport, Tim Collins and a lost half-million-dollars

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Yet another court case focusing on Flexport’s habit of culling staff has some fascinating details. And it also explains why cutting executives could be a financial boon for the San Francisco company. 

Remember Tim Collins? A vice president at Uber, he went on to become a VP at Amazon Logistics for nearly five years. After a brief stint at delivery company Gopuff, he was approached by Flexport in July 2022, starting as SVP operations in September 2022 – reporting to Mr Clark, who joined at the same time. 

He was clearly desired by Flexport: he was offered a $1m signing-on bonus, to be paid in two tranches, with the second $500,000 to be paid on the first payroll after his one-year anniversary. 

Mr Collins was also offered a base salary of $1m a year, with a bonus of up to 50% of that base salary. Oh, and a million ‘restricted stock units’ as well, over three years. It was all signed off by CEO Ryan Petersen. 

Not a bad offer. 

In return, according to his legal claim, he had “a successful first year as an executive at Flexport”. 

It says: “By the time of the quarterly business review on 24 July 2023, Flexport had achieved over 25% improvement in on-time performance, and a nearly 50% improvement in operations productivity. Operational performance under Mr Collins’ domain was so stable that by time of the Flexport board meeting on 31 August, operations performance was not even discussed.  

“Rather, the focus was nearly solely on the ‘top line’ revenue numbers of the company that were below the target the board had set.” 

Nevertheless, he was fired on 7 September – two days after Mr Clark had been pushed out, and five days before reaching his first-year anniversary. 

“Mr Collins was abruptly notified he was being terminated by Sanne Manders, Flexport’s president, and Jenn Boden, Flexport’s HR leader,” says the court case. (Ms Boden, also a former Amazon employee, left Flexport in October 2023, presumably after everyone she had had to fire, had been fired.) 

During the meeting when Mr Collins was dismissed, it was noted that Flexport understood the termination was just a few days before Mr Collins would receive the second installment of his one-time bonus and his first-year equity vest.  

“Neither Mr Manders nor Mr (sic) Boden indicated that the termination was for ’cause’, nor did anyone else at Flexport seek to represent the termination as for ’cause’.” 

Mr Collins is suing for his second $500,000 installment of the “unpaid wage” and also seeking damages for twice the amount, as well as costs and legal fees. 

As one Flexport observer put it: “Did those Amazon execs just see Flexport as some sort of honeypot?” 

While Mr Petersen signed the deal, it seems likely that Mr Clark picked out his top Amazon executives to follow him to Flexport. 

TechCrunch wrote: “Petersen’s main complaints around Clark’s leadership … have centered around costs, specifically hiring and expanding too quickly. However, Clark’s hiring and big ‘entrepreneurial’ vision for Flexport was hardly a secret. Clark was co-CEO alongside Petersen in his first six months on the job. Petersen then stepped into an executive chairman role.” 

Flexport also faces another case from fired staff. However, its latest round of cuts, reportedly expected to impact some 20% of staff, or 500 people, is likely currently under way and has not triggered – as yet – any new legal issues.  

The forwarder received a $260m investment from Shopify last month. Mr Petersen has said Flexport expects to be “profitable again” by Q4 24.