Lightspeed Commerce cutting 280 jobs as it focuses on profitable growth

MONTREAL — Lightspeed Commerce Inc. is cutting about 280 jobs, less than two months after its founder returned to the helm of the Montreal-based technology company. 

After integrating the company’s many acquisitions, “Lightspeed is now entering a new phase, one focused on profitable growth to capture the opportunity in front of us,” said founder and chief executive Dax Dasilva.

“This means making some hard decisions, like reducing spending in specific areas such as head count, to allow for investments in others,” Dasilva said in a statement. 

“As we navigate through this transition, we acknowledge the invaluable efforts of every team member who has played a role in our journey.”

The cuts represent about 10 per cent of Lightspeed’s staff-related operating spending, the company said. 

In addition, Lightspeed said it has undertaken several other cost reduction initiatives in facilities and operations. It expects that the majority of the restructuring charges will be incurred in the first quarter of its 2025 financial year, which ends on June 30.

The company also announced that its board has authorized the repurchase of up to 10 per cent of its public float of shares.

Dasilva served as its CEO for the bulk of the company’s history, having founded it in 2005, but became executive chairman when he turned the reins of the company over to JP Chauvet in February 2022. 

Dasilva returned to the CEO role in February this year, when Chauvet left the company.

Since his return, he’s been focused on profitability and on boosting Lightspeed’s share price, which he recently said hasn’t budged since he took the company public in 2019. 

“One of our top shareholders said to me, ‘I want to see Lightspeed be a real business. It can’t be growth at all costs with large losses just to capture market share forever. When is this company going to have a balance of growth and profitability?'” Dasilva said at the CIX Summit in Toronto last week. 

He said Lightspeed made its sales summit virtual instead of in-person as a way of cutting costs and also changed its work-from-home policies so it can reduce spending on food in its offices. 

Last November, Lightspeed reached positive adjusted earnings before interest, taxes, depreciation and amortization for the first time. As he made his return, Dasilva said the company’s priority is profitability, and as part of that he plans to put less of a focus on large mergers and acquisitions. 

National Bank of Canada analyst Richard Tse said in a note that the moves announced Wednesday by Lightspeed are positive.

“With investor appetites having shifted to more balanced (profitable) growth, we think this move should alleviate concerns that the Company was reverting to aggressive investment and potentially resuming its former acquisition path,” he wrote. 

However, Tse added that it’s too soon to tell whether the company’s focus on larger accounts will prove successful “beyond the current payment push,” and maintained the price target for the company at US$20. 

Analyst Daniel Chan of TD Cowen said the cost cuts will slightly reduce operating expenditures, and the restructuring “is a clear sign of Mr. Dasilva’s high focus on profitability.”

Chan said his firm continues to believe Lightspeed could be a candidate for a take-private deal.

“Improving margins could also make Lightspeed more attractive to potential buyers,” he wrote. 

Lightspeed shares closed up 5.46 per cent on the Toronto Stock Exchange, at $19.89.

This report by The Canadian Press was first published April 3, 2024.

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The Canadian Press