Montreal-based Lightspeed is cutting 300 jobs, but says it will continue to hire for marketing and development roles.
The rationalization announced Tuesday represents about 10% of workforce-related operating expenses for the business technology solutions provider.
The abolition of management positions should account for half of the cost reduction resulting from this reorganization.
The leaders explained that the decision was made to help it achieve “profitable growth” following acquisitions made in recent years. It was determined that the restructuring aims to consolidate all the integrated companies and products after absorbing the employees, technologies and processes resulting from the acquisitions.
The number of employees at Lightspeed has grown from 700 to more than 3,000 since the company went public in 2019.
Thus, the announced cuts aren’t surprising in the eyes of analyst Richard Tse of National Financial Bank, given investor sentiment toward unprofitable companies in the technology sector.
“Like many other companies, Lightspeed is taking actions to help them achieve profitability faster, which is a positive thing,” he said in a note sent to his clients.
Having said that, it probably also reflects some shortcomings as management says it will drive efficiencies and invest to focus on profitable growth. »
This expert calculates that the layoffs are likely to help the company approach the threshold of profitability within a few months and record its first profitable fiscal year in 2024.
His colleague Thanos Moskopoulos, from BMO, for his part adds that economic uncertainty could be a factor that played a role in the leaders’ decision on this restructuring.
The reorganization comes as Lightspeed spent several million dollars during the pandemic to renovate and expand its headquarters where the company now occupies all six floors of the Viger station.
In particular, a staff restaurant was opened on the ground floor of the main office during the fall in an effort to encourage staff to return to face-to-face work, attract new talent, and enhance staff retention.
Prior to Tuesday’s announcement, Lightspeed’s workforce numbered about 3,500 employees, 40% of whom are based in Montreal. It was not possible to tell how many jobs in Montreal were directly affected by the announced rationing.
Management says it’s currently going through a “hiatus” as Lightspeed prepares to deliver its latest quarterly financial performance in two weeks. However, management maintains that results should be within the predetermined range of revenue projections and exceed adjusted operating profit forecasts.
Lightspeed estimates that the actions announced Tuesday will result in an additional restructuring fee of $12 million to $14 million, consisting primarily of termination, employee benefits and related costs.
Lightspeed stock has been down sharply for just over a year and is now about twenty dollars on the Toronto Stock Exchange.
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