(Bloomberg) -- Canadian payments firm Lightspeed Commerce Inc. is cutting 300 people in a reorganization aimed at thinning its management ranks after a dealmaking spree.
“We know our organizational structure has become too complex, with overlapping roles and a top-heavy framework,” Chief Executive Officer Jean-Paul Chauvet told employees in a note Tuesday. “This bogs us down, creates inefficiencies, distracts us from our mission and distances us from what matters most — our customers.”
The Montreal-based firm, which provides point-of-sale software and systems for retailers and restaurants, has done several acquisitions since its 2019 initial public offering. But investors have gone cold on unprofitable technology firms, and Lightspeed shares are down more than 75% since the end of 2020.
Lightspeed rose 3% to $16.45 at 10:13 a.m. in New York.
“As you know, an important objective of ours is to be profitable next year,” added Chauvet. “With rising inflation and decreasing consumer spending affecting our customers, it’s imperative that we manage our own operating expenses efficiently during this time.”
It’s a sharp change in tone from the CEO’s previous comments about the year ahead, in which he said the company was in hiring mode and that an economic downturn could boost Lightspeed’s sales as merchants look for efficiencies through technology.
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The layoffs represent 10% of the 3,000 employees worldwide, with half of the cost reduction coming from management layers, the company said. The restructuring actions will result in a cash restructuring charge of $12 million to $14 million. The company expects to report revenue “within the previously established range” for the quarter ended Dec. 31, 2022.
BMO Capital Markets analyst Thanos Moschopoulos, who’s forecasting the company will reach profitability toward the end of 2023, said the restructuring may accelerate that timeline — “although this will also depend on whether, and to what extent, there’s been a change in Lightspeed’s expected revenue trajectory,” he wrote in a report.
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