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Canadian online furniture company Article laying off 216 people — 17% of staff

Canadian online furniture company Article laying off 216 people — 17% of staff
Canadian online furniture company Article laying off 216 people — 17% of staff

اخبارالعرب 24-كندا:الجمعة 5 أغسطس 2022 05:17 مساءً Vancouver-based furniture chain Article is laying off about one sixth of its workforce, as booming demand for its service during the pandemic is starting to slow.

CEO and founder Aamir Baig informed staff of the news on Friday. In total, 216 employees are being let go, which is roughly 17 per cent of the company's head count.

"This is not your fault, this is my fault," Baig said in a note to staff on the company's website.

Article was founded in 2011 before launching to the public two years later. The company says it turned profitable in 2015, and in a press release from March of this year, it says its revenue grew by 45 per cent between 2020 and 2021.

That's a common trend for a lot of online-focused companies,which saw booming demand for their services in the early days of the pandemic, as shopping moved online. Article benefitted from consumers with more time and money to spend sprucing up the homes they were stuck in during COVID lockdowns.

But that trend has changed direction of late.

"We anticipated the trend to online purchasing would be sustained," Baig said. "That did not happen, and it has since returned to pre-COVID trends."

Layoffs in online-focused firms

That's similar to language used by e-commerce giant Shopify last week, when it announced it would be laying off 10 per cent of its staff. Like many online-focused companies, Shopify's revenues grew aggressively in 2020 and 2021. The business increased staffing to keep up on the assumption that growth would continue. But growth has slowed to the point that it is now at the same level it would have been if the pandemic had not happened.

Baig's note suggests a similar trend. "Our financial projections showed that we were operating the business at a size larger than current demand would sustain. Put simply, we were living beyond our means. I needed to resize our business to restore our position of financial strength."

Baig said all affected staff — who are known as "particles" at Article — will have access to their benefits for a period of time. They will also be given severance packages and other support services, and will be allowed to keep company equipment such as laptops in their possession.

The news is the latest in a slew of layoffs recently announced by Canadian startups. Fellow Vancouver startup Unbounce laid off 20 per cent of its staff this week, and Toronto-based financial services firm ClearCo recently laid off 125 people.

Earlier this summer, fintech company WealthSimple laid off 159 people, or about 13 per cent of its staff.

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