Just months after expanding to Germany and Ireland, Canadian ecommerce investor Clearco is cutting 25 percent of its staff. This comes down to 125 employees. The company points to ‘the current macroeconomic environment’.
Clearco is an ecommerce investing firm which has funded 7 thousand businesses with over 3 billion euros to date. The firm has launched in Germany and Ireland within the last 5 months, following a funding round of over 200 million euros led by Softbank.
‘Current macroeconomic environment’
Clearco is now cutting 25 percent of staff, which comes down to 125 employees. Clearco’s CEO Michele Romanow and executive chairman Andrew D’Souza sent a company memo at the end of last week. Employees will receive severance pay and two years of job transition support. Which departments are affected, was not mentioned.
Clearco mentions slowed down ecommerce growth.
The co-founders point to ‘the current macroeconomic environment’, mentioning rising interest rates, inflation and currency swings. In addition, Clearco talks about supply chain issues as well as ‘a slowdown in e-commerce growth’.
Not Clearco’s first layoff round
Clearco has set foot in Germany and Ireland merely months ago. With regards to international operations, the company says it is ‘considering strategic options’. The investment firm also operates in the United Kingdom and the Netherlands.
The company is ‘considering strategic options’.
Up to this point, European expansions have been met with setbacks. After the German launch, Clearco layed off 10 percent of Irish staff. And back in 2020, 8 percent of employees were let go due to the economic repercussions of the pandemic.
Ecommerce companies in rough seas
“We were building to match the growth of the economy and now face significant headwinds that simply didn’t exist six months ago,” the co-founders write. “We grew our headcount too quickly in anticipation of continued economic growth and that decision rests on us alone.”
Just last week, Shopify cut 10% of staff.
Customer demand is dialing back after a peak during the pandemic. This puts ecommerce businesses in a tough position. Just last week, ecommerce platform Shopify cut 10 percent of staff due to fluctuating customer demand.