A growing number of Canada’s emerging technology giants are scaling back hiring in the face of worsening economic news as the sector shifts rapidly from a grow-at-all-costs mentality to relative austerity.
Growing economic turmoil stemming from inflation, rising interest rates, supply chain issues and war in Ukraine have weighed heavily on valuations of publicly traded tech stocks since fall and spread to private markets this year.as fast-growing technology companies aim to preserve cash for what could be a prolonged period of economic uncertainty with much less access to cheap and abundant capital than last year.
Hootsuite CEO Tom Keiser said his Vancouver company, which has grown to 1,400-plus people from less than 1,200 in January, will end 2022 with “hundreds of people less than what we had planned to end the year with.” Hootsuite, which provides digital tools for companies and governments to manage and monitor online posts, generates more than US$200-million in revenue and is growing by about 20 per cent a year.
Vendasta CEO Brendan King said the Saskatoon vendor of digital tools to companies that serve small businesses is also taking “a bit of a breather on hiring,” even though rising interest rates and inflation haven’t yet hurt his business. “Before it was ‘grow grow grow.’ Now it’s ‘grow EBITDA margins,’” he said, meaning the 700-person company is looking to improve earnings before interest, taxes, depreciation and amortization.
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