A Fulfillment Center Now Announces Unexpected Layoffs

May 3, 2024

Updated on May 15, 2024

A fulfillment center now announces unexpected layoffs after a potential funding fell through, the CEO confirmed earlier this week.

Fulfillment provider Airhouse made a “major layoff” and transferred customers to third-party logistics partners in April after a potential funding round fell through, CEO and co-founder Kevin Gibbon announced in a LinkedIn post Wednesday.

The company was on the brink of closing the round before it collapsed at the last minute, instituting the layoff on April 12, Gibbon said.

The amount of people Airhouse laid off wasn’t specified, but the reduced headcount meant the company couldn’t support all of its customers.

Airhouse, which relies on partner 3PLs for warehousing goods, decided to transfer its customers to work directly with the 3PLs that had been serving their businesses.

Airhouse stopped sending over orders to the 3PLs’ warehouse management systems on Monday.

Gibbon said the company gave affected customers weeks of notice that this was happening, although he added that some are having trouble with the transition.

“We continued to push orders to the 3PL without charging them for anything to make the transition as smooth as possible,” Gibbon said.

“However, given how much Airhouse does in the background, we knew this was not going to be a smooth transition but we unfortunately had no other choice.”

Airhouse customer Bask Suncare was “left with hundreds of unfulfilled orders, completely scrambling to migrate to a new fulfillment partner” as a result of the changes, founder and CEO Mike Huffstetler said on X Tuesday.

Gibbon responded that Airhouse gave Huffstetler specific dates Bask Suncare would need to make the transition by, which Huffstetler disputed.

This year’s layoffs and customer transfers raise questions about Airhouse’s future, reports Supply Chain Dive.

The business model for companies like Airhouse that lean on 3PL partners aren’t sustainable, said Matthew Hertz, co-founder of Second Marathon Consulting, which helps e-commerce brands find fulfillment providers.

This is especially the case in an environment where venture capital and private equity funding to help them grow is harder to come by.

“The 3PL space is a low-margin business,” Hertz, formerly Shyp’s VP of business partnerships, told Supply Chain Dive.

“A 3PL that’s really killing it and doing well is making 10, 12, 15% margins.

For you to be a 4PL, essentially a middleman, to sit on top of that and make margin is just nearly impossible.”

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Also Read: A Massive Grocery Chain With 400 Stores Is Now Closing

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A popular Italian restaurant now announces an unexpected closure after nine years in business, according to an email sent to customers.

Italian Eatery, located in south Minneapolis, Minnesota, told its long-time customers that it planned to shut its doors.

The beloved restaurant, also known as ie, also plans to close its sister restaurant un dito, known for its Sicilian seaside street food, per The US Sun.

They have not announced a closing date but are expected to close between late May and mid-June, according to Bring Me The News.

“As we prepare to close our doors at ie and un dito, we’d like to extend a heartfelt invitation for you to join us for our final months of service,” an email to customers from Carrara $ Co. read.

“Gather with us at the table and let us reminisce over the incredible memories we’ve created together and cherish the moments shared over the past nine years.”

Italian Eatery has been a popular spot since its opening in 2016 and is known for its full-service drinks and dining near Lake Nokomis.

Un dito is a 400-square-foot space that specializes in sips and snacks or afternoon gatherings like you would see in Italy, according to its website.

The restaurant’s “Last Supper” reservations will be released every week and shared in weekly newsletters, according to its website.

“As always, we will continue to reserve walk-in tables at both ie + un dito for our beloved neighborhood,” the announcement read, according to the outlet.

Carrara & Co. also owns due, a focacceria and Italian market in St. Paul, Minnesota that the company calls “Italian Eatery’s spawn, aka quirky little brother,” according to its website.

Despite the Minneapolis closures, due will remain open.

“I’m pleased to inform you that all other Carrara & Co operations remain unaffected, including Due Focacceria, and we are even expanding our services,” according to a statement, reported by NBC affiliate KARE.

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Also Read: A Massive Grocery Brand Now Files For Chapter 11 Bankruptcy

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