Many North American technology companies have expressed issues with expanding too quickly during the COVID-19 pandemic.
In the U.S., major tech companies like Robinhood Markets, Inc. and Coinbase Global, Inc. have laid off hundreds of workers over the past few months and the same labour trend is being seen in Canada.
“We were building to match the growth of the economy and now face significant headwinds that simply didn’t exist six months ago,” said Michele Romanow, co-founder of Clearco, in a LinkedIn post after cutting around one-in-four jobs.
Here’s a look at Canadian technology companies that have announced job cuts over the past few months.
Wealthsimple Inc. CEO Michael Katchen said the tech company would be letting go of 159 staff members on June 15, which is about 13 per cent of its workforce.
“Our business grew at an unprecedented rate, and we have been aggressively building to meet the needs of a wave of new clients since then,” Katchen said in a press release on June 15.
“Of course volatility works both ways, and we’re seeing the other side of it now as the pandemic market conditions unwind.”
Canadian venture capital company Clearco announced on July 29 that it was cutting 125 employees, or one-out-of-four workers.
Romanow cited rising interest rates, high inflation, swings in the Euro and a slowdown in e-commerce growth as some of the reasons behind this decision.
“We grew our headcount too quickly in anticipation of continued economic growth and that decision rests on us alone,” Romanow said.
On July 26, Ottawa-based tech giant Shopify Inc. laid off around 1,000 workers, which is about 10 per cent of its staff.
Tobias Lütke, chief executive officer of Shopify, said his team bet “the share of dollars that travel through e-commerce rather than physical retail – would permanently leap ahead by five or even 10 years.”
“It’s now clear that bet didn’t pay off,” Lütke said in a press release.
“What we see now is the mix reverting to roughly where pre-COVID data would have suggested it should be at this point. Still growing steadily, but it wasn’t a meaningful five-year leap ahead.”
Hootsuite Inc. fired 30 per cent of its workforce on August 9, with the CEO Tom Keiser citing the need for a strategic change within the company.
“We need to refocus our strategies to drive efficiency, growth and financial sustainability,” Keiser said in a statement to BNN Bloomberg.