Vancouver-based Thinkific Labs Inc. (TSX:THNC) announced Tuesday it would be cutting its staff by 75 people as layoffs that have plagued the tech industry show little signs of slowing down.
These are not the first cuts announced by Thinkific, the online-course creation platform that went public in April of 2021.
Thinkific boasted 450 employees in their financial filings at the end of 2021. Since then they have cut at least 175 jobs or 39 per cent of their workforce.
The layoffs are one in a log line of staff reductions taking place across the global tech industry.
Amazon.com Inc. (Nasdaq:AMZN) announced last week that it would lay off 18,000 positions globally. Last year, Vancouver-based Hootsuite Inc. made two rounds of staff reductions, cutting 30 per cent in August and another five per cent cut in November.
Thinkific burst onto the public market during B.C.’s recent tech surge that saw 14 B.C. companies get elevated to unicorn status over a 16-month period between December 2020 and March 2022.
The company went public in April of 2021 with a market capitalization of more than $1 billion after shares debuted at $15 each.
Since then, Thinkific’s stock price has steadily and sharply declined, sinking to roughly $2 last June where it has hovered since then.
The market cap since the IPO has plummeted to $140.3 million.
In Tuesday’s announcement, Thinkific said that cuts are part of the company’s 2023 commitment to achieve positive earnings.
"We closed the fourth quarter as expected, and with the initiatives we announced today, profitability is in sight," said Greg Smith, co-founder and CEO of Thinkific.
"Having said that, any decision that affects people is not easy to make, and we understand the impact it has on both the [employees] to whom we are saying goodbye, as well as the ones who are staying.”
While the company’s revenue during the first three quarters of 2022 grew 37.7 per cent from revenue in the first three quarters of 2021, losses nearly doubled: jumping 93 per cent to $32.8 million in the first three quarters of 2022 from $17 million in the first three quarters of 2021.
Full-year financial results for 2022 will be released on Feb. 22.
Brent Holliday, CEO of Garibaldi Capital Advisors told BIV in December that the difficulties the tech industry is currently struggling with are the result of too much capital flooding into the industry, creating an inevitable bubble.
“There was so much capital that shifted towards tech,” said Holliday. “You could see a supply-side bubble coming a mile away. There was just too much money.”
In an interview with BIV last week, Innovation Minister Brenda Bailey said that tech layoffs seem to be affecting the U.S. more than B.C. and said anecdotally that she is hearing that those employees who have been laid off are finding new tech jobs in the province.
“So far, I am hearing that people who are experiencing layoffs are, in fact, finding work and there are still many, many jobs open in the tech sector right now,” said Bailey. “Not to say that can’t change, but as it is right now we’re continuing to see growth in our tech sector.”
—With files from Tyler Orton