Four months after making its Canadian Securities Exchange (CSE) debut, Legible has announced plans to lay off more than a third of its employees.
Vancouver-based Legible offers a browser-based, mobile-first ebook reading platform. Citing plans to streamline its operations and reduce the company’s annual burn rate by nearly $2 million, Legible has laid off 23 members of its 60-person staff, effective April 4.
Legible has laid off 23 members of its 60-person staff.
“In the course of achieving our vision, we underwent a rigorous review of our organizational stature and made the difficult decision to reduce our staff,” Legible founder and CEO Kaleeg Hainsworth told BetaKit. “There were reductions in each area of the company and we feel that we have the desired level of staff for the current stage.”
With the move, Legible has become the second publicly-traded Canadian tech company to announce significant layoffs in recent weeks, joining Vancouver-based, Toronto Stock Exchange-listed Thinkific.
On March 29, Thinkific disclosed plans to lay off 100 people—or one-fifth of its team—in an effort to cut costs amid what the company’s CEO said has become a difficult and unpredictable capital-raising environment.
Legible went public late last year through a reverse takeover with big ambitions. Last year, Hainsworth told BetaKit that long-term, he wants the British Columbian company to become “the internet for books” by offering a bunch of different things, including an ebook delivery and reading service, the ability to add multimedia components to ebooks, a publishing platform for authors and publishers, and a philanthropic approach.
At the time, Hainsworth cited the expanded reach associated with being a publicly-traded firm and the ability to tap public market funding as two factors that would play an important role in fuelling Legible’s growth.
Legible (which trades under the symbol ‘READ’) opened on the CSE on December 1 at a price of $1.26 CAD per share, shooting as high as $1.40 before dropping to a low of $0.90 the following day. Since then, however, the company’s share price has fallen precipitously. At time of publication, shares in Legible are trading at $0.25 apiece.
During this time, valuations of publicly-traded tech firms have dropped significantly amid rising inflation, interest rates, and Russia-Ukraine-related tensions, which has made it more difficult for unprofitable, high-growth firms to access financing.
This environment led Thinkific to conduct layoffs of its own, and could lead other funding-reliant Canadian tech companies to follow suit.
Hainsworth noted that Legible’s lower share price impacts its ability to raise capital, calling the present environment “challenging times for everyone.”
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To date, Legible has raised a total of just over $11 million CAD in private equity funding from a group of undisclosed individual investors and small funds.
As part of the restructuring, Legible said that the company’s CTO, Adam Zouak, has also “elected to move on.” Zouak’s duties will be assumed by Hainsworth.
According to Legible, the layoffs carry a “one-time aggregate restructuring cost” of $75,200. It is unclear how the layoffs will impact Legible’s growth strategy, which involves increasing its content library, scaling its operations into new markets, and adding new features and functionalities to its platform.
Since these layoffs were disclosed, Legible has announced that it is “in the process of finalizing a strategic corporate restructuring and reallocation of duties following the layoffs and resignations of a number of its staff.”
According to Legible, CFO Helina Patience and Head of Accessibility Laura Brady are also “no longer with the company.” It is unclear whether Patience and Brady resigned or were laid off, or how many members of the company’s team have resigned. Brady has agreed to continue to consult with Legible.
UPDATE (04/11/22): This story was updated to note additional information shared by Legible following the initial layoffs.
Feature image of Kaleeg Hainsworth, courtesy Legible.