Airhouse moves clients to partner 3PLs since they make "major layoff"

The reorganization at the fulfillment provider was announced by CEO Kevin Gibbon following the collapse of a prospective funding round.

Official notification from the Airhouse board of directors

Fulfillment provider Airhouse underwent a significant downsizing, termed a "major layoff," and subsequently transitioned its clientele to third-party logistics partners in April. CEO and co-founder Kevin Gibbon disclosed this development in a LinkedIn post on Wednesday.

Gibbon revealed that the company had been on the verge of finalizing a funding round before it abruptly fell through, prompting the implementation of the layoff on April 12. While the exact number of individuals affected by the layoff was not specified, the reduced workforce rendered Airhouse unable to sustain its entire customer base.

Airhouse, which relies on partner 3PLs for warehousing goods, has opted to transition its customers to directly collaborate with the 3PLs that had been servicing their enterprises. As of Monday, Airhouse ceased forwarding orders to the warehouse management systems of the 3PLs.

According to Gibbon, the company provided affected customers with several weeks' notice of this transition, albeit acknowledging that some are encountering difficulties with the shift.

"We continued to route orders to the 3PL without imposing charges to facilitate a seamless transition," stated Gibbon. "Nevertheless, given the intricate background operations managed by Airhouse, we anticipated challenges in the transition, but regrettably had no alternative."

Following these changes, Airhouse customer Bask Suncare found itself "confronted with hundreds of unfulfilled orders, scrambling to migrate to a new fulfillment partner," recounted founder and CEO Mike Huffstetler on Tuesday. Gibbon responded by asserting that Airhouse had provided Huffstetler with specific transition deadlines, a claim disputed by Huffstetler.

Gibbon co-founded Airhouse in 2020 subsequent to the closure of his shipping company, Shyp, in 2018. Airhouse has established itself as a fulfillment platform aiding brands in e-commerce operations and logistics, experiencing promising growth in its initial stages.

In March 2022, Airhouse concluded an $11 million funding round, featuring strategic investors Flexport and Easypost. Gibbon highlighted in a blog post about the funding round that the company had witnessed a fivefold increase in revenue and doubled its staff count.

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