Hootsuite, Trulioo, Canada Drives, Copperleaf among Canadian tech companies to cut hiring plans

Hootsuite’s owl mascots are featured in the company’s cabin-themed office in Vancouver.The Canadian Press

A growing number of Canada’s emerging tech giants are cutting hiring in the face of deteriorating economic news as the sector rapidly shifts from a growth-at-all-costs mentality to relative austerity.

The CEOs of Hootsuite Inc., Trulioo Information Services, Canada Drives Ltd., Copperleaf Technologies Inc., Vendasta Technologies Inc. and Clutch Canada Inc. – Canadian companies with tens or hundreds of millions of dollars in revenue and hundreds of employees or more – told the Globe and Mail last week that they had scaled back their hiring plans this year. Other Canadian tech companies cut staff this month, including Wealthsimple Technologies Inc., Ritual Technologies Inc. and BBTV Holdings Inc.

“Every business is rethinking its growth plans; we’re doing the same,” said Dan Park, CEO of Clutch, a Toronto-based online used-car marketplace operator that has halved plans to hire 50 to 60 people in 2022. .

Growing economic turmoil stemming from inflation, rising interest rates, supply chain issues and the war in Ukraine have weighed heavily on valuations of publicly traded tech stocks since the fall and are escalating. are released to private markets this year. This has led to job cuts, hiring freezes and scaled-back hiring plans as fast-growing tech companies aim to preserve cash for what could be a prolonged period of economic uncertainty with far less risk. access to cheap and abundant capital than last year.

Clutch rival Canada Drives saw its business jump 580% in the first quarter compared to the same period a year ago. But the company, which manages $250 million in sales a year, also fell short of its fundraising goal after several big investors pulled out of the space, CEO Cody Green said in an interview. . Canada Drives announced on Monday that it had raised $40 million from subprime lender goEasy Ltd., and Mr. Green said he hoped to raise at least $10 million more from others. “Last fall, we expected to be able to raise over $100 million ‘in 2022 for a second straight year,’ but as the market has changed, our expectations and needs have also changed along with our growth plans. “, did he declare.

Now, Canada Drives is “adapting our growth to the current funding environment,” Green said. This means that the company, which has 725 employees, now plans to grow to 850 this year, not the 1,000 originally planned.

Hootsuite CEO Tom Keizer said his Vancouver business, which has grown to more than 1,400 people from less than 1,200 in January, will end 2022 with “hundreds fewer people than we expected. to end the year. Hootsuite, which provides digital tools for businesses and governments to manage and monitor online posts, generates over $200 million in revenue and is growing around 20% annually. But “we’re trying to balance the high growth mindset we entered the year with and the way we were investing and driving against this more conservative world we find ourselves in,” he said. -he declares.

When asked if Hootsuite might consider layoffs, Keizer said, “We’re doing our best to manage expenses and slow down hiring to avoid that. I have done this in the past. It is a soul draining and culture killing experience.

Several companies say they are reducing hiring or managing spending more cautiously, even though their operations have not been affected. “We’re still growing, but we’ll be more cautious as we grow because of” the economy, said Judi Hess, CEO of Copperleaf, a Vancouver-based company that sells business analytics software to utilities, transport companies and others. She said Copperleaf, with 450 employees, will hire “dozens” fewer people than it otherwise would have this year.

Vendasta CEO Brendan King said the Saskatoon-based digital tools provider to businesses that serve small businesses is also taking “a bit of a breathing space when it comes to hiring,” even as rising interest rates and inflation have not yet harmed his business. “Before it was ‘grow grow grow’. Now it’s about growing EBITDA margins,” he said, meaning the 700-person company is looking to improve its profits before interest, taxes, depreciation, and amortization.”If they aren’t quota reps or developers” who are building critical products, “we’re probably not going to hire them.”

Anthony Mouchantaf, Head of Venture Capital at Royal Bank of Canada’s RBCx innovation banking platform, said: “People are still digesting the scale and scope of the macro environment and its significant impact. on technology companies. He thinks many recent layoffs have been “more prophylactic than reactionary” as companies “prepare for what they see as significant potential but not necessarily inevitability”.

Not all fast-growing Canadian tech companies are taking precautionary measures. Some, like chatbot provider Ada Support Inc. and text-tutoring company Paper Education, have made no changes to hiring plans. Trulioo has adapted its hiring to the pace of sales. Last year, the Vancouver-based digital identity verification service provider doubled its revenue to $100 million and doubled its staff to 400 as demand soared from cryptocurrency and e-commerce platforms . These areas have been hit hard in the current economic environment and overall revenue will likely grow by less than 40% in 2022, as will hiring, CEO Steve Munford said: “We are not laying off or freezing hiring, but we are absolutely not hiring at the rate we were at” in 2021.

Meanwhile, the downturn has helped many companies struggling to find talent, but it has also presented a dilemma for Kelly Schmitt, CEO of Calgary-based Benevity Inc., which sells software used by workers in hundreds of workplaces. ‘global companies to donate money and volunteer hours. to charities.

Benevity suspended hiring for two to three months at the start of the pandemic and eventually caught up with its staffing needs, adding 160 people in May and June. “Looking at the state of the world, I feel like we should slow down,” Ms Schmitt said. “But I also don’t want to take a wrong step and do something like we did two years ago and then we keep growing and we can’t keep up. This makes scenario planning difficult.

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