A furniture chain based in Vancouver Article is letting go of about a sixth of its employees because the demand for its services, which was very high during the pandemic, is starting to slow down.
On Friday, CEO and founder Aamir Baig told the staff about the news. There will be a total of 216 people let go, which is about 17% of the company’s staff.
In a note to staff posted on the company’s website, Baig said, “This is not your fault; it’s mine.”
Article was started in 2011, but it didn’t open to the public until 2013. The company says it started making money in 2015, and in a press release from March of this year, it said that between 2020 and 2021, its revenue grew by 45%.
That’s a common pattern for a lot of online-focused businesses. As shopping moved online in the early days of the pandemic, there was a lot of demand for their services. Consumers who were stuck in their homes during COVID lockdowns had more time and money to spend on making their homes look better.
But recently, this trend has changed.
“We thought that the trend of shopping online would continue,” Baig said. “That didn’t happen, and things have gone back to how they were before COVID.”
Layoffs In Online-Focused Firms
This is similar to the way the e-commerce giant Shopify talked about laying off 10% of its employees last week. In 2020 and 2021, Shopify’s sales grew quickly, as they did for many online-focused businesses. The business hired more people to keep up with growth, assuming that it would keep going. But growth has slowed so much that it is now at the same level it would have been at if the pandemic hadn’t happened.
Baig’s note points to the same pattern. “According to our financial plans, we were running the business at a size that was bigger than what current demand could support. Simply put, we were spending more than we could afford. I had to change the size of our business so that we could be financially stable again.”
Baig said that all affected employees, who work at Article and are called “particles,” will have access to their benefits for a while. They will also get severance packages and other help, and they will be able to keep things like laptops that belong to the company.
The news comes after a number of Canadian startups recently said they were letting people go. This week, another Vancouver startup, Unbounce, let go of 20% of its staff, and the Toronto financial services company ClearCo recently let go of 125 people.
This summer, the fintech company WealthSimple fired 159 people, which is about 13% of its workforce.