Saskatoon-based startup 7shifts has recently laid off 68 employees as part of a push to become more efficient, BetaKit has learned.
These layoffs, which occurred on January 11, impacted 19 percent of the restaurant software firm’s workforce. They marked 7shifts’ second round of cuts in the past four months after the company reduced its headcount by seven percent in September to “right-size” its business.
“We’re focusing on efficiency to ensure that we remain competitive with the runway we need to grow in alignment with market expectations.”
7shifts VP of marketing Libby DeCamps confirmed the extent of 7shifts’ latest layoffs to BetaKit, noting they come as 7shifts contends with difficult market conditions.
“In today’s economic environment, like many companies, 7shifts is facing increasingly challenging market conditions,” DeCamps told BetaKit. “To navigate this, we’re focusing on efficiency to ensure that we remain competitive with the runway we need to grow in alignment with market expectations.”
Founded in 2014 by CEO Jordan Boesch, 7shifts sells team management software to restaurants. The startup aims to help restaurants simplify employee scheduling, improve team communication, and reduce monthly labour costs.
7shifts’ platform, which allows restaurants to manage everything from employee hiring to training, scheduling, tips, payroll, and retention, has catered to over 40,000 restaurants and counts The Burger’s Priest, Burrito Boyz, and Chatime among its customers.
To date, 7shifts has raised about $152 million CAD in total funding from a group that includes SoftBank, Enlightened Hospitality Investments, Ten Coves Capital, Relay Ventures, and Conexus Venture Capital.
This amount includes $102 million in Series C financing led by SoftBank from February 2022. According to a letter previously shared with BetaKit that was sent to 7shifts employees announcing the company’s fall 2023 layoffs, that funding came “at the peak of high market conditions and valuations.”
After securing this capital, 7shifts set out to invest in product development and push further into the employee lifecycle, shoot for “ambitious revenue targets,” and expand its workforce.
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Since then, economic conditions have deteriorated, and this letter noted that 7shifts has felt the impact of rising inflation and interest rates on restaurants. With the company no longer on pace to meet its 2023 revenue goals, last fall, 7shifts took “preventative measures to right-size the business” and cut staff, letting go of 30 employees or seven percent of its team.
7shifts’ latest layoffs impacted the startup’s research and development, sales, business operations, and people and culture teams, DeCamps told BetaKit.
“In order to continue on our desired growth trajectory, we are refocusing on the parts of our business that are proven to be scalable and efficient while remaining committed to our mission of improving the lives of restaurant operators and their teams,” she added.
According to DeCamps, 7shifts has sunset go-to-market initiatives that have been less efficient than its traditional, product-led growth strategy and reduced its investment in areas that do not directly contribute toward increasing its revenue.
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Despite these cuts, DeCamps claimed that 7shifts is still seeing “healthy growth,” as the number of restaurant workers on its platform has increased 125 percent year-over-year.
While 2023 was a brutal year for tech layoffs, despite some deviation monthly, global tech layoffs have been steadily declining quarterly since last year’s peak in Q1, per Layoffs.fyi.
Still, cuts have continued into 2024: Layoffs.fyi indicates that 58 tech companies worldwide have collectively shed 7,785 employees since the beginning of January, as of publication time. This group includes Toronto-based BenchSci, which laid off 70 team members, or 17 percent of its staff, earlier this month.
Members of the Canadian tech industry expect to see more layoffs this year. Meanwhile, signals from Big Tech firms like Google and Amazon indicate that they will continue slashing jobs, with some companies pointing to artificial intelligence as justification.
Feature image courtesy 7shifts.
