FreshBooks, Thinkific, Revelate, Bridgit among latest firms to cut staff amid downturn.
More than a dozen Canadian tech companies have recently laid off employees, BetaKit has learned, joining a growing list of firms to shed staff in 2022.
As 2022 comes to a close, Canadian tech companies are continuing to reduce headcounts as they look to weather what has been a difficult year, and prepare for what is expected to be a bleak 2023.
“The economic environment has dramatically shifted over the past number of months and tech companies are needing to adjust.”
-Mallorie Brodie, Bridgit
Five Canadian tech companies, Revelate Data (formerly TickSmith), Bridgit, Reach, E Automotive (E Inc.), and Ledn have all confirmed to BetaKit that they have made layoffs in recent weeks. Meanwhile, social media posts indicate that a group of at least 12 other companies have quietly reduced their staffing levels.
Following numerous mass layoffs earlier this year, these firms join the growing number of tech companies to cut employees in 2022, indicating that the pain of the economic downturn is not yet over.
According to layoff tracking website Layoffs.fyi, 977 companies globally have cut a combined 151,576 employees so far in 2023, at publication time.
Although many tech companies continue to hire in Canada today, Indeed has said that job postings on its site for Canadian tech roles have dropped 32 percent since May, and show no signs of stabilizing amid these conditions.
As Bridgit co-founder and CEO Mallorie Brodie put it, “the economic environment has dramatically shifted over the past number of months and tech companies are needing to adjust.”
Brodie’s Kitchener-Waterloo-based construction tech firm laid off 13 employees—approximately 13 percent of its staff—last quarter. The move, which was first reported by The Record and since confirmed by BetaKit, comes about a year after Bridgit secured $24 million CAD in Series B financing.
Montréal-based Revelate also laid off 24 employees, approximately 30 percent of its staff, last month. The data fulfillment company, which raised $20 million CAD in Series A funding at the end of last year under the name TickSmith, rebranded to Reveal and shuffled its leadership this fall, with former CRO Ian Gilbert becoming CEO. “This was very tough on the people affected, but it was the right thing to do for the sustained health and growth of the business,” Gilbert told BetaKit.
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Meanwhile, Calgary payments startup Reach laid off about 12 percent of its staff in November, in a move its founder and CEO Sam Ranieri told BetaKit came in light of “overall market conditions and [a] general correction in the tech space.” Specifically, Ranieri noted that Reach, which announced $30 million in funding in March, has felt the impact of the retail sector cooling as the economic environment has shifted since then.
Toronto-based AutoTech firm E Inc. did not share how many team members were impacted by its recent layoffs, which came just over a year after the online vehicle auction marketplace went public on the Toronto Stock Exchange (TSX). In a statement provided to BetaKit, E Inc. CEO Jason McClenahan said the cuts came in response to “incredibly challenging market conditions” faced by the auto and tech industries, and are designed to “bring expenses in line with profitability and meet shifting market and shareholder expectations.”
For its part, Toronto crypto lending startup Ledn also attributed its staff cuts to current market conditions, but declined to confirm how many employees it laid off in a statement to BetaKit from co-founder and CSO Mauricio Di Bartolomeo. Ledn, which has raised a total of $130 million CAD since the beginning of 2021, is currently feeling the effects of the crypto winter.
Another 12 established and emerging Canadian tech companies from across the country also appear to have made layoffs in recent months.
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Multiple social media posts viewed by BetaKit from impacted employees indicate that eight Canadian tech companies have recently cut staff: Vancouver software firms Thinkific and Chrysalis; Calgary-based oil and gas tech company Validere and workforce upskilling startup Headversity; Toronto accounting tech company FreshBooks, payments firm Versapay, and healthtech startup Smile Digital Health; and Montreal-based communications firm Tervene.
Meanwhile, individual social media posts viewed by BetaKit from impacted employees indicate that four other Canadian tech companies—Burnaby-based legaltech firm Clio, Toronto consumer loyalty app Drop, Ottawa-based software startup Solace, and Montréal point-of-sale company Lightspeed Commerce -may have also recently cut staff. According to LinkedIn insights, Clio, Solace, and Lightspeed’s headcounts have remained steady, while Drop’s has fallen by 16 percent over the past six months.
BetaKit has reached out to all of the above-mentioned companies for comment. Only three responded by publication time, with Smile declining to provide comment for this story.
In a statement provided to BetaKit, a Lightspeed spokesperson said, “as with any company with our size and scale, there has been turnover and staff movements for a variety of reasons.” However, they added that “this is business as usual, and nothing out of the ordinary,” emphasizing that Lightspeed continues to hire aggressively.
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Despite closing a $12.5 million Series A round in January, multiple social posts from Headversity employees indicate the company has made targeted layoffs in recent months. However, CMO Steven Gramlich claimed in a statement to BetaKit that the company has not laid off staff in light of the market environment. “We have not ‘restructured’ because of, or in anticipation of, macro market conditions,” said Gramlich. “We have, however, continued to aggressively pursue our growth plan, which has meant some role changes in the company.”
As BetaKit was first to report, Vancouver-based Web3 company Dapper Labs laid off 22 percent of its staff in November. But multiple employees on social media claim that the company had quietly laid off an unknown number of people this calendar year, prior to last month.
Dapper Labs told BetaKit that all other staff cuts made by the company in 2022 have been due to performance. “We have done only one round of layoffs this year,” a Dapper Labs spokesperson told BetaKit, pointing to indicating the November cuts. “We have made no other layoffs—quietly or publicly. Everything else has been performance-related,” they added.
The amount of tech layoffs this year from around the world has already surpassed figures following the Great Recession.
Quiet layoffs also appear to be taking place at companies that already executed mass layoffs earlier this year. In addition to the social posts reviewed by BetaKit, Techcouver has reported that Thinkific recently cut staff following its mass layoffs earlier this year when market conditions first began to deteriorate, about a year after the firm made its TSX debut. Thinkific did not provide comment for this story.
Going forward, VCs anticipate that Canadian tech startups will continue to face a challenging fundraising environment. “If you are an early-stage founder, the next four to six months are probably the hardest environment to raise in the past decade,” Bessemer Venture Partners investor Aleeza Hashmi recently said during a November, BetaKit-led panel at SAAS North.
Georgian investor Michelle Yu added that amid these conditions, the segmentation between tech firms that are continuing to perform well and startups that are experiencing greater challenges is becoming more pronounced. “The companies that have been struggling are, to be honest, continuing to struggle,” said Yu. “Their focus is really, how can we extend our cash runway, how can we achieve profitability, or how can we look towards a potential exit?”
For many tech companies to date, the path forward has involved cutting staff. As The Economic Times has reported, the amount of tech layoffs this year from around the world has already surpassed figures following the Great Recession brought on by the 2008 financial crisis. Heading into what stands to be a tough 2023 as a recession looms, these numbers will likely continue to mount, both in Canada and abroad.
Feature image courtesy Unsplash. Photo by Tim Gouw.
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