Toronto-based takeout service Ritual Technologies Inc. cut nearly half of its work force on Wednesday, adding to a slew of global layoffs in the tech sector.
Thirty-eight employees were affected, representing 40 per cent of their staff, Ritual confirmed on Friday. The Globe and Mail learned about the layoffs on Thursday after Lior Samfiru, an employment lawyer at Samfiru Tumarkin LLP, told reporters that “multiple Ritual employees” contacted the firm for assistance with their termination packages.
“Making difficult decisions is never easy and we are grateful for the invaluable contributions our team members played in shaping Ritual into what it is today,” Ritual chief executive officer Ray Reddy said in an e-mailed statement.
“While difficult, this decision strengthens our company and positions it for success as we continue to support thousands of restaurants worldwide to better service their customers and grow their businesses. Our entire team in Toronto, a city we proudly call home, and around the country remains committed to delivering on that vision.”
This is the third round of staff cuts for Ritual over the past few years. It had more than 300 employees when it was looking like a breakout hit in 2019. About a year ago, it cut 23 people, which at the time was 15.5 per cent of the work force of 148. As of March 31, that number was down to 77 employees.
Ritual, whose mobile app enables consumers to skip lines at quick-service restaurants by ordering and checking out in advance, was one of most promising, globally minded and fast-growing Canadian startups until the pandemic hit its business hard.
Prepandemic, it partnered with more than 10,000 restaurants in Europe and Asia, including hubs such as Berlin, Hamburg, Amsterdam and Hong Kong.
It has struggled to bounce back, particularly as people continued to work from home, cutting into its core office-worker business: Revenue in 2021 was US$10.98-million and stagnated, slipping to US$10.3-million in the 12-month period ended March 31, according to data shared with investors and obtained by The Globe and Mail.
Meanwhile, the company has continued to sustain operating losses, which improved from a loss of US$15.2-million in 2021 to a loss of US$10.9-million in 2022 and US$2.2-million in the quarter ended March 31. It had US$10.2-million in cash on March 31, down from $23.9-million at the end of 2021.
Ritual has raised nearly US$135-million in venture capital, funded by 13 investors, including Mistral Venture Partners, Greylock and Golden Ventures, according to Crunchbase.
Canada’s tech industry has seen better days. When the economic downturn hit, investors quickly jumped off tech stocks, while rising interest rates and cooler demand left companies strapped for cash. That led many to engage in aggressive cost-cutting moves: 100,000 tech workers lost their jobs in the first six weeks of the year, according to online database Layoffs.fyi. In May, Shopify Inc. SHOP-T, once Canada’s most valuable company, slashed 20 per cent of its work force.