Toronto-based FreshBooks has laid off 10 percent of its employees, BetaKit has learned.
These cuts impact about 80 members of the accounting software company’s 800-person team, according to a letter viewed by BetaKit that was sent to FreshBooks employees this morning. A source familiar with the company’s operations told BetaKit that these layoffs impact FreshBooks’ marketing, human resources, and product teams, including CMO Paul Cowan.
With an IPO no longer on the immediate horizon, FreshBooks shifted its focus to profitability last year.
BetaKit has reached out to FreshBooks for comment.
This headcount reduction marks FreshBooks’ second round of layoffs in recent months. As BetaKit previously reported, the late-stage FinTech firm shed an unknown number of employees late last year. With its CMO now out, FreshBooks has also seen three senior C-suite executives leave the company over the past year, including its CFO and CTO.
In early 2021, FreshBooks CEO Don Epperson took over from founding CEO Mike McDerment to spearhead the company’s global expansion efforts. According to the source, Epperson was brought in to help take FreshBooks public. Epperson’s appointment as CEO, coupled with the company’s addition of a CFO with public market experience last fall, hinted at a potential initial public offering (IPO) being in the cards.
But amid frigid public market conditions, a FreshBooks IPO in the near future seems unlikely. With an IPO no longer on the immediate horizon, FreshBooks shifted its focus to profitability last year.
FreshBooks’ latest layoffs come despite the fact that Q1 2023 has been the best quarter in the company’s history.
Founded in 2004, FreshBooks helps small-to-medium-sized businesses manage finances, billing, payroll, payments, and client engagement through its accounting platform. Since then, the company has amassed a customer base of over 30 million people across 160 countries.
To date, FreshBooks has raised hundreds of millions in funding to date from a group of investors that includes Accomplice, Gaingels, Manulife, and Barclays. FreshBooks, which became a unicorn in 2021 after closing $130 million USD as part of its Series E financing, more recently secured a $100 million debt facility last August from BMO and JP Morgan.
In addition to Cowan, FreshBooks’ C-suite turnover includes the departure of long-time FreshBooks CFO Michael Washinushi last September, as previously reported by BetaKit. In Washinushi’s stead, FreshBooks brought in Wayne Jackson.
In a statement at the time, Epperson hailed Jackson’s experience “leading global companies through periods of hyper-growth, including acquisitions and entrance into public markets” as an asset to FreshBooks.
Meanwhile, FreshBooks CTO Oliver Fisher quietly transitioned into an advisory role in January 2023, per LinkedIn, and has since become CFO of Homebase. Fisher appears to have been replaced by Stefano Grossi: according to his LinkedIn page, Grossi has been promoted from SVP of product to chief product and technology officer.
Like FreshBooks, plenty of other firms have made similar cuts over the past few months amid the economic downturn, in what has already been a heavy 2023 for tech layoffs. Per Layoffs.fyi, over 500 tech companies globally have laid off nearly 140,000 employees since the beginning of January—roughly 86 percent of the amount let go during all of 2022.
FreshBooks is also far from the only Canadian FinTech firm to cut staff recently. According to The Logic, Toronto-based, H&R Block-owned Wave Financial, which provides bookkeeping and payments solutions to small businesses, laid off 50 employees earlier this month.
With files from Douglas Soltys.
Feature image courtesy FreshBooks.