Skip to main content

The Toronto-based investor-relations software maker Q4 Inc. QFOR-T said Tuesday that it will lay off 8 per cent of its staff as it joins the ranks of tech companies racing to cut costs amid a sector-wide downturn.

Staff from Q4′s sales, marketing and research-and-development teams were expected to be affected, the company said in a press release. Like other companies that are laying off staff – amid macro uncertainty that is in large part related to persistent inflation and rising interest rates – Q4 acknowledged that it needed to more quickly seek profits.

About 48 people are expected to lose their jobs. In an interview, chief executive Darrell Heaps said that Q4 had been hit not just directly by shifting market expectations, but also because those expectations slowed the influx of new potential clients: companies completing initial public offerings that need Q4′s software to communicate with investors and parse data.

“We had our organization set up for a market like the end of last year,” Mr. Heaps said. “When the market changes around you, and you see demand is different … that’s what tees up the decision point about the future strength of the business.”

This sea change comes after more than a dozen years of historically low interest rates coincided with a massive sense of optimism about technology companies, prompting venture capitalists, institutional financiers and everyday investors to plow trillions of dollars into the sector. It’s been a whiplash few months for tech: After all those years spent prioritizing growth at all costs, many companies are scrambling to adjust their business models to reach sustainable levels of profitability.

Though the share prices of publicly traded tech companies have trended upward in recent weeks, they remain volatile, and many smaller companies are grappling with the shock of that volatility. After filing to go public in May, 2021, Q4 paused its plans for several months amid a down-pricing of new issues, then listed on the Toronto Stock Exchange in October down 4 per cent from its opening price.

Q4 shares were worth $4.43 as of Tuesday afternoon, down about 60 per cent from last year’s opening price. When the company reported its most recent financial results two weeks ago, Mr. Heaps warned: “Given the challenging macro environment, and with our peak investment period behind us, we are accelerating our path to profitability.”

The company’s software helps investor-relations teams, facilitating webcasts and earnings calls, organizing financial statements and providing data analysis for clients, including for activist shareholder activity. Q4 says it works with more than 2,650 public companies, including Wal-Mart, McDonald’s and Netflix.

Mr. Heaps told The Globe that the company began putting restructuring plans into place midway through this year, and reduced spending in other ways as it finished fine-tuning some of its technologies.

While he said the Q4 platform is “durable in difficult markets,” he added that “when the market changes so quickly, it’s the responsibility of management to acknowledge when those changes happen and make tough decisions.” Doing so, he said, would help the company “to emerge with strength.”

Q4′s layoffs follow numerous similar announcements across Canadian tech this summer, including at Shopify Inc., CFT Clear Finance Technologies Corp. (better known as Clearco), Hootsuite Inc. and Wealthsimple Technologies Inc.

Last week, CTV News reported that Saskatchewan small-business software seller Vendasta Technologies Inc. had recently laid off less than 5 per cent of its work force. Earlier that week, tech-news website BetaKit reported that Montreal health-technology startup Alaya Care Inc. had laid off 80 employees.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error

Editorial code of conduct

Tickers mentioned in this story