Lightspeed Commerce Inc. is cutting about 300 jobs as part of a reorganization intended to unify a slew of businesses it has purchased in recent years.
The reduction represents about 10% of the operating expenses related to the number of employees of the Montreal e-commerce company, with half of the reduction in costs coming from management.
Lightspeed had 3,000 employees at the end of March, according to statistics from financial markets data firm Refinitiv.
“After years of rapid growth – both organic and through acquisitions – we know that our organizational structure has become too complex, with overlapping roles and a very cumbersome framework,” said the CEO of Lightspeed, JP Chauvet, in an open letter to staff announcing the cuts. .
“It slows us down, creates inefficiencies, distracts us from our mission and takes us away from what matters most: our customers.”
Lightspeed reached an agreement to buy New Zealand-based Vend Ltd., a cloud-based retail management software company, last spring.
The deal follows the acquisition of ShopKeep, which helps restaurants and retailers accept payments and run their business, for US$440 million, as well as the purchase of the restaurant software company Upserve.
Following the acquisitions, Lightspeed has worked to find a role for all of its new hires while continuing to be nimble, said Chauvet, who became chief executive in February when Lightspeed founder Dax Dasilva stepped down.
“Now we need to return to a more streamlined model with fewer people involved in decision-making,” he wrote in his letter.
“That doesn’t mean these layoffs only affect Lightspeeders from acquired companies — it means reducing unnecessary management layers and complexities regardless of how or when someone joined us.”
As a result, Chauvet expects half of the savings from the job cuts to come from leadership positions and said Lightspeed has cut staff at the vice president level and above by 25%, or highest percentage of roles impacted by employee level.
He expects the move to streamline the business and better prepare it for a potential economic downturn, which has already led to layoffs at tech companies including Shopify, Netflix, Meta and Wealthsimple.
Clearco, the seed finance company for ‘Dragons’ Den star Michele Romanow, cut 25% of its staff on Monday.
The cuts look set to continue as tech valuations plummet and people return to their pre-pandemic habits. Layoffs aggregator Layoffs.fyi found that 1,024 global tech companies laid off 154,336 employees in 2022 and two weeks in January has already calculated that another 91 companies made 24,151 layoffs.
“The current economy has been a catalyst for us to streamline our operations,” Chauvet wrote in his memo.
“With rising inflation and falling consumer spending affecting our customers, it is imperative that we effectively manage our own operating expenses during this time.”
The company, he added, still aims to be profitable next year.
It estimates the cuts will result in a restructuring cash charge of US$12-14 million, primarily comprised of severance, benefits and related costs, primarily in the fourth quarter.
The company will release its third quarter results on February 2. It expects its third-quarter revenue to be within its forecast range, while its adjusted earnings before interest, taxes, depreciation and amortization are expected to beat its outlook.
This report from The Canadian Press was first published on January 17, 2023.
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