Cargomatic, a Venice, Calif., trucking industry start-up that is patterned after Uber, but carries freight instead of people, has laid off 50 to 60 workers, or about half its staff.
The on-demand shipping platform is one of several seeking to connect shippers directly with carriers, competing with third-party brokers in the process. It is for local deliveries rather than long-haul freight transport.
The staff reduction was first reported by Business Insider and also noted by reviewers on online employer-rating service Glassdoor.
“Key to growing a successful company is knowing where to staff appropriately at different growth phases. Sometimes that means making difficult decisions, and to that end, we recently reduced the size of our marketplace operations and inside sales teams,” Jonathan Kessler, Cargomatic’s chief executive and co-founder, said in a statement.
“The Cargomatic marketplace continues to expand and has enjoyed year-over-year growth since our founding in 2013,” Kessler said.
The cuts come as competition heats up in on-demand service by local truckers.
Last month Convoy, a Seattle start-up in Seattle founded by former Amazon employees, completed a new round of funding, raising $16 million. Jeff Bezos, the chief executive of Amazon, was part of investor group that put money into Convoy last year.
Cargomatic has raised $17 million from investors, according to a company spokesman.
Although the company has cut staff, Kessler said it also is working to grow the business. He said the staff cuts allowed the company to hire Chuck Oeleis as executive vice president of sales last month. Oeleis, a former vice president for Carlile Transportation, is responsible for building and managing Cargomatic’s sales efforts.
The company also named Meaghan Diem as vice president of enterprise sales to focus on growing Cargomatic’s large-volume client base. Diem is a former vice president at Coyote Logistics.
“Their wealth of experience across the logistics, transportation, and supply chain sectors will greatly benefit Cargomatic as we enter our next stage of growth,” Kessler said.
Cargomatic operates in Los Angeles, New York and San Francisco. It hopes to expand “all over the U.S. and, really, internationally as well,” Kessler told Trucks.com earlier this year. It’s not clear how the staff reduction will affect those expansion plans.
The company’s spokesman declined to answer Trucks.com questions, saying that Kessler’s statement would be Cargomatic’s only response.
In an interview with Trucks.com earlier this year, Kessler expressed optimism about Cargomatic’s prospects, saying that it could fill a gap in the trucking industry.
“We give the ability to shippers to work with all these independent operators from the local level,” he said. “And because we’re connecting with so many of these different small trucking companies, we have very competitive pricing.”
He said Cargomatic was “democratizing” technology for trucking companies and carriers.
“Everything we give, we give away for free,” he said. “We give the ability to the small trucking companies to act like they’re big trucking companies. They get EDI [electronic data interchange] feed integration and the ability to take all the information associated with a shipment and pass it over to the customer. And of course we fill their space on the truck.”