The social-media management company Hootsuite Inc., a beacon of Canada’s tech sector in the early 2010s, told employees Tuesday that it would lay off 30 per cent of its staff worldwide.
The Vancouver-based company confirmed the news Tuesday morning. “We want to be very clear this decision is not a reflection on them, or their work,” chief executive officer Tom Keiser said in an e-mailed statement. “We need to refocus our strategies to drive efficiency, growth and financial sustainability.” About 400 people are expected to lose their jobs at Hootsuite as part of Tuesday’s internal announcement.
The Hootsuite layoffs are the latest in a string of deep cuts by Canadian tech companies adjusting to an era in which funding is less free-flowing. In recent weeks, Shopify Inc. said it would lay off 10 per cent of staff; CFT Clear Finance Technology Corp., also known as Clearco, laid off 25 per cent; Wealthsimple Technologies Inc. let go of 13 per cent of staff as a key investor eyed slashing its valuation of the company by nearly half. Many other companies have since followed suit.
Hootsuite was founded by entrepreneur Ryan Holmes in 2008, riding the social-media wave with a dashboard that allowed users to manage their accounts. In doing so, it became a major benefactor of the 2010s’ flood of venture capital, raising about $250-million by 2014 from investors such as Accel, Insight Venture Partners, Fidelity Investments and OMERS Ventures.
Even earlier this year, Hootsuite remained one of Canada’s largest privately held technology companies. It had about 1,400 employees in late June, up from less than 1,200 in January, but Mr. Keiser acknowledged earlier this summer that the broad downturn of the tech sector would reduce its hiring plans.
Many tech companies bulked up in the early stages of the COVID-19 pandemic, during which billions of people turned to digital services for many stretches of isolation, driving tech companies into a hiring spree. But now companies are reducing costs at a rapid pace. After years of free-flowing venture capital, an era of macroeconomic uncertainty has been ushered in by high inflation and rising interest rates.
This has left many tech companies fearful of a future with less funding, and executives have begun to shed staff en masse across the world as they try to stretch their existing capital as far as they can.
People in customer-experience and product-management roles at Hootsuite made public posts on LinkedIn Tuesday saying they’d been part of the layoffs. One person said they found out as they watched friends’ Slack accounts deactivated one by one before finding out in the early afternoon that they’d lost their job, too.
The Hootsuite CEO’s statement said that the company would try to help its laid-off employees find work elsewhere. “Our focus is on our people,” he said. He added that the company would try to ensure its customers were not affected.
Mr. Keiser succeeded founder Ryan Holmes as CEO, who stepped down in 2019 amid leadership concerns after a failed attempt to sell the company. Hootsuite sought a price of about US$1-billion, but struggled to find offers higher than US$700-million, amid concerns about the company’s revenue growth and customer and employee churn. Hootsuite also laid off about 100 people at the time.
At the Collision technology conference this past June, Mr. Keiser told The Globe and Mail that macro uncertainty had not yet affected customer demand. “But but we believe we’ll see that as customers get more conservative, so we’re getting more conservative as well,” he said.
With a report from Sean Silcoff.
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Josh O’Kane