Clearco, a Canadian e-commerce lender, is laying off 125 people, almost 25% of its workforce, as it faces up a notable slowdown in the industry and the general global economic downturn.
In an email sent to staffers, later posted on LinkedIn, co-founders Andrew D’Souza and Michele Romanow wrote that they are “deeply saddened” to be making these cuts. The Toronto-headquartered company is also “considering strategic options” for its international business.
In an official note, Romanow and D’Souza blame the painful decision on the macroeconomic environment and a slowdown in e-commerce growth, stating that they grew the firm’s headcount too rapidly.
Clearco has funded over 10,000 businesses to the tune of $5 billion, providing small companies with a way to secure funding without having to give up any of their equity. The company has raised hundreds of millions of dollars in debt and equity in the past two years but has been laid low by an economy that has gone south rapidly in recent months.
In June 2022, it started laying off staff in Ireland barely three months after entering the nation, according to information from Betakit. Notably, it has also increased the repayment fees for loans and subleased some of the office space.
Romanow is a renowned figure in Canada being a star of the Dragons’ Den TV show. She faced pushback on her note thanking the employees.
Adam Smith wrote:
“While this is a nice note, and I’m sorry for the people being let go – What’s missing is what personal sacrifices the founders, the CEO, the board, and the exec leadership team are taking? Are you taking a suspension in pay, did you cancel your bonuses/equity payouts? Are the execs taking half pay till the company turns around?
“Or does your bad bets only affect those below you who are deemed expendable in tough times?”