Toronto-based accounting software company FreshBooks has restructured its leadership team and cut six percent of its staff.
FreshBooks has announced that president Mark Girvan and CEO Don Epperson are stepping down, and two existing leaders—Mara Reiff (chief customer officer) and Wayne Jackson (chief financial and administrative officer)—have been appointed as interim co-CEOs.
According to FreshBooks founder and board chair Mike McDerment, the late-stage FinTech firm has engaged a search firm that is now actively recruiting a new CEO.
“It is winter in startup land. Winter is a season, and FreshBooks has experienced it before.”
FreshBooks is also laying off employees and closing down its operations in Raleigh, North Carolina. FreshBooks did not disclose how many members of its staff will be impacted by these cuts. According to LinkedIn, FreshBooks currently has 642 employees, indicating that these layoffs may impact as many as 39 people.
The moves come about eight months after BetaKit reported that FreshBooks laid off 10 percent of its employees, or 80 members of its 800-person team, and set its sights on reaching profitability in 2025 with new external capital. FreshBooks’ most recent staff cuts mark its third round of layoffs in the past year as BetaKit reported that the company cut staff and adjusted its hiring plans last December.
With these changes, FreshBooks has now lost at least five senior leaders since last September, including its president, CEO, CMO, CFO, and CTO.
“It is winter in startup land,” wrote McDerment in a blog post announcing these moves. “Winter is a season, and FreshBooks has experienced it before. The early days of the pandemic. The 2008 financial crisis. FreshBooks was founded in the aftermath of the dot-com bust.”
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McDerment noted that prior economic downturns helped FreshBooks refine its focus and strengthen itself over the long run. “I trust this winter will be no different,” he added.
FreshBooks did not share any further details regarding why the company made these changes.
Speaking on condition of anonymity, sources BetaKit spoke with said that FreshBooks’ latest changes come as, after years of pursuing international expansion, the company is looking to cut costs and shift its focus back to the North American market.
Founded in 2004, FreshBooks helps small and medium-sized businesses manage finances, billing, payroll, payments, and client engagement through its accounting platform.
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Girvan had been with FreshBooks for 10 years, working as president since May. For his part, Epperson replaced McDerment as FreshBooks CEO in 2021 during the early days of the COVID-19 pandemic. Reiff joined Freshbooks as its first chief data officer shortly afterwards, becoming chief customer officer earlier this year.
Shortly after Epperson was brought on to spearhead the company’s international growth strategy, FreshBooks closed $130 million USD in Series E funding at a more than $1 billion valuation to fuel these ambitions. In August 2022, FreshBooks secured a $100-million debt facility and hired Jackson as CFO to support its global expansion.
But market conditions have changed since then, and FreshBooks and many other Canadian tech companies have shifted their focus from growth to profitability as the economy has deteriorated, investors have adjusted their expectations, and fundraising has become more difficult.
Feature image courtesy FreshBooks.