In January 2024, Saskatoon-based restaurant software firm 7shifts made headlines by laying off 68 employees, or 19% of its workforce, in an effort to increase efficiency. This marked the second round of layoffs within just four months, following a 7% reduction in September. In this article, we'll delve into the reasons behind these layoffs and discuss the potential future impact on the company and its industry.
The layoffs at 7shifts were driven by a combination of economic pressures and the need for increased efficiency. The company faced challenging market conditions due to the current economic environment, which included rising inflation and interest rates impacting restaurants. As a result, 7shifts was not on pace to meet its 2023 revenue goals. In response, the company decided to refocus on the parts of its business that were proven to be scalable and efficient, while remaining committed to its mission of improving the lives of restaurant operators and their teams.
7shifts VP of marketing, Libby DeCamps, confirmed the extent of the layoffs and acknowledged the difficult market conditions the company was facing. These layoffs come amidst a broader trend of tech layoffs, with 58 tech companies worldwide shedding 7,785 employees since the beginning of January 2024.
While specific figures for the expected costs and savings from the layoffs are not available, it's clear that 7shifts aims to reduce expenses and increase efficiency in response to challenging market conditions. The company is refocusing on scalable and efficient aspects of its business, sunsetting less efficient go-to-market initiatives, and reducing investments in areas that don't directly contribute to revenue growth. This strategic realignment positions 7shifts to better adapt to the current economic environment and optimize for continued growth in the restaurant software industry.
The impact of 7shifts' layoffs on the food industry may be multifaceted. As the company refocuses on scalable and efficient aspects of its business, it could lead to a more streamlined and effective product offering for restaurant operators. This, in turn, may prompt competitors to follow suit and prioritize efficiency in their own operations. Additionally, the layoffs highlight the challenging market conditions faced by the restaurant software industry, which could signal a need for other companies in the sector to reevaluate their strategies and adapt to the changing landscape.
7shifts' layoffs were driven by economic pressures and the need for increased efficiency, as the company faced challenging market conditions and missed revenue goals. The strategic realignment aims to reduce expenses and optimize growth in the restaurant software industry. These developments may prompt competitors to prioritize efficiency and signal a need for sector-wide adaptation. The company's future actions could focus on streamlining operations and fostering innovation to maintain a competitive edge.
