News / Forto lays off more staff as it closes offices in Bremen and Madrid

30/10/2023

Digital forwarder Forto has reportedly closed its offices in Bremen and Madrid, after laying off some 10% of its staff earlier this year.

The closure of the Madrid office means it no longer has a presence in Spain and, with the closure of its Bremen office, reported by DVZ on Friday, the move is said to mean at least 75 more job cuts.

DVZ also reported that CCO Jochen Freese, formerly of Ceva, Hellmann and UTi, will be taking early retirement and be replaced by Forto’s head of strategy, Fabian Struck.

The Loadstar spoke with Mr Freese earlier this month, but he gave no indication of problems within the company. Instead he noted that Forto’s “800” staff were “key to allowing customers an integrated approach to forwarding – using both digital tools and personalised customer service”.

In January, after Forto axed around 90 jobs, one insider told The Loadstar no more job cuts were likely, adding: “Staff were assured by the executive leadership team that, after the process, Forto was lean enough to ride out the storm.”

However, this year’s poor market conditions with no peak season may have had more of an impact on the firm than anticipated. And Forto is not alone: other jobs cuts were recorded at Flexport; logtech companies such as cargo.one; and, of course, major tech companies, including the demise of Indian digital forwarder FreightWalla in June.

This has led to questions about the sustainability of the venture capital-backed business model.

Forto has raised $610m across eight rounds of funding, its most recent, in 2022, raising $250m. It has 24 institutional investors including Northzone, Inven Capital and Cherry Ventures.

Charles Marrale, CEO of digital forwarder ExFreight, which has no VC involvement, told The Loadstar VC firms valued a company based on a growth trajectory, which often led to companies offering unprofitable rates to grow their trajectory, but in turn, they “burn cash faster”.

He added: “I believe that might have contributed to the downfall of, or headaches for, VC-funded companies.”

However, after the previous job cuts at Forto this year, Mr Freese told The Loadstar: “We consider how much cash we have in the bank as pretty comfortable. Our decision to cut back was not based on investors or shareholders, it was based on a changed business environment.

“Up to the third quarter of last year we had certain market assumptions. It was not about meeting KPIs, we needed to course-correct. And, in fact, we’ve continued hiring new people in customer-facing and commercial roles.”

Forto has not responded to a request for a current comment. Headquartered in Berlin, it still has offices in Tianjin, Ningbo, Shanghai, Shenzhen, Ho Chi Minh, Hanoi, Naples, Milan, Warsaw, Munich, Dusseldorf, Cologne, Rotterdam, Hamburg, Singapore and Hong Kong.