According to Lightspeed, these layoffs will help streamline the firm’s operating model, impacting around 10 percent of Lightspeed’s headcount-related operating expenditures, half of which is coming from Lightspeed’s management layers.
“The launch of these flagship products, coupled with our new, leaner structure, will allow us to be more agile and responsive to our customers.”
-JP Chauvet, Lightspeed
A Lightspeed spokesperson confirmed to BetaKit that these layoffs also represent 10 percent of Lightspeed’s 3,000-person team at roles and functions across the company.
“After years of rapid growth–both organic and through acquisitions–we know our organizational structure has become too complex, with overlapping roles and a top-heavy framework,” wrote Lightspeed CEO JP Chauvet in a letter to employees explaining the move. “This bogs us down, creates inefficiencies, distracts us from our mission and distances us from what matters most–our customers.”
With these cuts, Lightspeed joins a growing list of Canadian tech companies to shed staff amid the market downturn. For its part, Lightspeed framed these layoffs as representing “the next deliberate step in executing Lightspeed’s strategy to unify all of its acquired companies and products.”
“We have done outstanding work to complete our goal of integrating each brand and rolling out our flagship products to market,” said Chauvet. “The launch of these flagship products, coupled with our new, leaner structure, will allow us to be more agile and responsive to our customers as we invest in innovations that will fuel our long-term growth.”
This restructuring marks a shift for Lightspeed. Last year, in interviews with BetaKit, Chauvet emphasized Lightspeed’s sizeable hiring goals. “When the world is firing, we’re hiring,” the CEO told BetaKit. A month later, he told BNN Bloomberg that layoffs were not in the cards for Lightspeed for the time being.
As BetaKit reported in December, Lightspeed has seen some staff turnover in recent months, which a company spokesperson said was “business as usual, and nothing out of the ordinary,” emphasizing that Lightspeed continues to hire aggressively. “As with any company with our size and scale, there has been turnover and staff movements for a variety of reasons,” the spokesperson told BetaKit at the time.
Despite these cuts, Lightspeed said it plans to continue to hire for “core go-to-market and development roles that support profitable growth.”
Founded in 2005, Lightspeed provides cloud-based commerce and point-of-sale (POS) software to restaurants, retailers, and hospitality providers. The acquisitive retail tech firm, which trades on the TSX and NYSE as ‘LSPD,’ has teams across North America, Europe and the Asia Pacific region that cater to businesses in over 100 countries.
These cuts follow a tumultuous year for Lightspeed. The company’s stock price plummeted amid the broader tech selloff, founding CEO Dax Dasilva was replaced by Chauvet as the firm overhauled its C-suite, and converted some of its many acquisitions into a slew of new products.
Following the restructuring announcement this morning, Lightspeed’s TSX stock price has dipped slightly, dropping over one percent to $21.70 CAD per share at time of publication. In total, Lightspeed’s stock price still remains down more than 80 percent since the September 2021 release of a short-seller report critical of the company’s metrics.
Lightspeed anticipates that this restructuring will cost the company $12 million USD to $14 million in severance payments, employee benefits, and other related expenses.
The company is set to release its fiscal Q3 results on February 2. Lightspeed expects to report $185 million to $190 million in revenue, falling within its previously established outlook.
The retail tech firm, which forecast a $9 million loss in its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in November, said it now ancticipates next quarter’s results will “come ahead” of this figure. Lightspeed aims to reach break-even on an adjusted EBITDA basis by 2024.
As a tech company shedding staff right now, Lightspeed is far from alone. According to layoff tracking website Layoffs.fyi, around 154,000 tech roles across over 1,000 tech firms globally were eliminated in 2022. Though 2023 has only just begun, per Layoffs.fyi, 101 tech companies around the world have already cut more than 25,000 employees.
Feature image courtesy Lightspeed.