Flexport's CEO Ryan Petersen said on X that it's rescinding dozens of job offers.
Since then recruiters have taken to social media to denounce his decision.
Recruiters point out that rescinding job offers is not uncommon – and not illegal.
Since Flexport CEO Ryan Petersen announced on Friday that it would be rescinding dozens of "signed offer letters" for new hires, several recruiters have expressed their disapproval with the logistics company's about-face.
One executive recruiter called Petersen's actions "low down sick" and "low down lousy" and "an obvious reflection of his dark greedy soul and spirit" in a LinkedIn post on Friday.
Technical recruiter Nick Roman said in a LinkedIn post on Friday that "this kinda of behavior puts all employees in a moral dilemma" when they give their employer two weeks' notice because they run the risk of being unemployed if their new offer is rescinded.
Roman later told Insider that Flexport's decision might also set a new precedent for how people think about job offers.
Applicants may now think that "if a company is a legal entity, and their interest is to protect their bottom line at all costs then I also have to protect my bottom line," he said.
"You create this dilemma, where people are gonna sit there and say, 'I got a new job offer, I'm super excited, but I don't really know if I'm still gonna get that job on day one'."
Offer letters are generally not considered legally binding documents for either employers, or potential candidates. As the labor and employment law firm Olivier & Schreiber notes on its website, offer letters "just propose a position to potential candidates" and signing one merely closes a candidate off from accepting other job offers.
And recruiters say it's not uncommon for either employers or candidates to renege on them.
Philipp Slappnig, a recruiter for the logistics industry who founded a recruiting firm called pickedwell, told Insider via LinkedIn message that he's witnessed both employers and new hires part ways after an offer letter is signed without any consequences. However, he's seen more candidates walk away from an offer than employers have rescinded them.
While Flexport may be in the clear legally, recruiters its likely to damage the company's reputation, as it leaves dozens of candidates in professional limbo, and breaches the trust of prospective hires.
"In the age of social media and employer reviews, such a move can have lasting repercussions on a company's ability to attract top talent," a senior technical recruiter wrote on LinkedIn. He also noted that rescinded offers have been among the "most challenging" situations he's had to deal with in his professional life.
Petersen, however, came out in defense of his decision on Friday, noting in a follow-up post on X that he was "taking a lot of criticism," especially for his public approach to breaking the news.
In his post, Petersen said that Flexport has created a "pretty generous stipend for candidates whose accepted offers we've rescinded." He added that Flexport would be pivoting its entire recruiting organization to "helping these awesome people land on their feet with great companies."
"This will be one of the easier decisions that I have to make right now to get Flexport back to profitability," Petersen wrote.
—Ryan Petersen (@typesfast) September 8, 2023
Flexport's decision to rescind offers comes after a sudden executive shakeup at the company. On Wednesday, Dave Clark said on X that he was stepping as CEO, just a year after joining from Amazon.
In January, Flexport also laid off about a fifth of its workforce. In a memo to staff at the time, then co-CEOs Clark and Petersen wrote that "lower volumes, combined with improved efficiencies as a result of new organizational and operational structures, means we are overstaffed in a variety of roles across the company."
Flexport's not the only major company to have revoked jobs for new hires en masse. In June 2022, cryptocurrency platform Coinbase rescinded job offers via mass emails — a decision that at least one recipient denounced as "unprofessional."
Petersen and Flexport did not immediately respond to requests for comment from Insider, made outside normal working hours.
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