Two Vancouver-based technology firms are laying off dozens of staffers as the sector’s troubles continue to mount, forcing many companies to slash costs during a broad-based slowdown.
Crypto and blockchain firm Dapper Labs Inc. and social media management company Hootsuite Inc. announced a significant number of reductions to their teams on Wednesday. Both cited macroeconomic concerns as a pressure point that led to the cuts.
Dapper Labs is laying off roughly 130 people, which is 22 per cent of its work force. At the same time, Hootsuite is cutting 5 per cent of its employees, or about 50 people globally.
In August, Hootsuite had already cut down 30 per cent of its staff worldwide, which caused 400 people to lose their jobs, bringing its head count to about 1,000 people before Wednesday’s additional layoffs. “As we navigate the current economic and market realities, we are closely monitoring to ensure that the size and costs of our organization fit the size of our business today,” said Jodi Echakowitz, a spokesperson for Hootsuite, in a statement.
“It is clear that we have some areas of duplication, reduced or slowed demand, and layers of management that we are addressing which will unfortunately result in approximately 5 per cent of our employees leaving the business.”
In a statement posted to Dapper Labs’ website, chief executive officer and founder Roham Gharegozlou said the layoffs are part of a “broader refocus” of the company’s strategy and organization in order to bring it to “a more sustainable cost structure.”
He said departing employees will receive roughly six months of continued health and medical benefits, four months of mental-health benefits, three months of severance, and alumni support. Hootsuite did not provide those details.
Mr. Gharegozlou said he still believes in the expanding potential of Web3, an industry buzzword used to describe technologies and businesses affiliated with a decentralized wave of the internet, which boosters say will be led by the crypto and blockchain sectors. “But today’s macroeconomic environment means we aren’t in full control of the timing,” he said.
“Our company grew incredibly fast – from 100 to over 600 employees in less than two years – introducing operational challenges which prevented us from being as aligned, nimble and community-driven as we need to be. I take responsibility for that, as well as for the difficult decision to do this layoff and restructure our business to better serve our communities,” Mr. Gharegozlou wrote in his memo to staff Wednesday.
It is a far cry from just a few months ago. In late June, at Collision Conference, one of the tech industry’s biggest events, Mr. Gharegozlou took the stage on opening night to assail cryptocurrency skeptics, such as software multibillionaire Bill Gates. “With all due respect, I don’t worry too much about people that don’t see the future,” Mr. Gharegozlou told the sold-out crowd in Toronto at the time.
Many tech companies have significantly scaled back hiring plans and reduced staff in order to combat economic uncertainty stemming from inflation, rising interest rates, the war in Ukraine and a reversal of trends observed early in the COVID-19 pandemic. Simultaneously, venture capital has dried up, valuations have cratered, and tech stocks are plummeting.
According to layoffs.fyi, a website that tracks reductions in the tech sector, more than 95,000 people have been laid off in 728 companies globally in 2022 so far, as of Wednesday.
With a report from Sean Silcoff