Tom Keiser, the Zendesk Inc. alumni, has run Hootsuite since mid-2020.Handout
Vancouver social-media dashboard company Hootsuite Inc. replaced its chief executive officer and began its third major round of layoffs in six months Wednesday amid one of the worst weeks for Canadian tech workers since the sector’s downturn began in late 2021.
Hootsuite confirmed to The Globe and Mail that it would lay off about 70 people, or about 7 per cent of its work force. This follows a more significant round of layoffs in August, where nearly 400 of its then-1,400 staff lost their jobs, which was followed by another 50 people losing positions in the fall.
The company also announced former CareerBuilder Inc. chief executive Irina Novoselsky as its new chief executive, replacing Tom Keiser, the Zendesk Inc. alumnus who has run the company since mid-2020.
Also on Wednesday, the charitable-donation-management company Benevity Inc. said it would lay off 137 people, or 14 per cent of its staff. It was one of the stars of the Calgary tech ecosystem, and was valued at US$1.1-billion in 2020. But chief executive Kelly Schmitt wrote on LinkedIn that “macroeconomic conditions have changed dramatically, and the demand we expected to see has slowed significantly.”
The tech downturn began in late 2021 as interest-rate hikes prompted by high inflation began pushing public companies’ valuations down. Startups of all sizes have since been scrambling to cut costs as investors remain skittish and consumers grapple with both inflation and higher rates.
Workers have borne much of the pain from these cuts, and that pain does not appear to be subsiding. Since late last week, Vancouver online-course platform Thinkific Labs Inc. cut 76 jobs and Toronto e-commerce merchant financier CFT Clear Finance Technology Corp. (or Clearco) laid off 50 people, in what was the second mass layoff round for both in recent months.
Then, on Tuesday, the Montreal payment-tech company Lightspeed Commerce Inc. said it would lay off a 1/10th of its 3,000 staff, while Toronto online-car marketplace Clutch Canada Inc. said it would cut more than half of its staff, amounting to 150 people. On Wednesday, Microsoft Corp. confirmed earlier reports that it was making deep staff cuts, revealing that it would cut 10,000 workers, or about 5 per cent of its work force.
“It was a difficult decision to make but these reductions to our global work force will best position Hootsuite for the long term,” Hootsuite said in an e-mailed statement Wednesday.
Ms. Novoselsky was viewed as a turnaround chief executive at CareerBuilder, an HR-technology company, as well as at the document-outsourcing company Novitex Enterprise Solutions Inc.
The outgoing chief executive Mr. Keiser had also joined Hootsuite at a turnaround moment. The company was once one of the darlings of the domestic tech sector. But it struggled in the late 2010s after a failed attempt by its founding chief executive Ryan Holmes to sell the company, and as social-media platforms have changed how their services interact with third-party dashboards.
By late 2019, Hootsuite’s board became concerned about Mr. Holmes’s leadership, and he exited the company. He was replaced by Mr. Keiser several months later, yet it continued to struggle amid a changing financial landscape for technology companies.
At the Collision technology conference last June, Mr. Keiser told The Globe and Mail that macroeconomic uncertainty had not yet affected customer demand. “But we believe we’ll see that as customers get more conservative, so we’re getting more conservative as well,” he said.
Since then, advertising spending has slowed among companies such as Meta Platforms Inc., while Twitter Inc. has undergone massive cuts as new owner Elon Musk retools the notoriously unprofitable company. In the past week, many third-party dashboards and platforms that work with Twitter have reported trouble connecting with the social network.
Hootsuite declined to provide interviews with its new and departing chief executives.
Josh O’Kane
Sean Silcoff