Calgary-based Benevity has laid off 137 employees, or 14 percent of its team, as the charitable donation management software firm contends with lower than anticipated customer demand.
Benevity announced the cuts Wednesday in a statement from CEO Kelly Schmitt posted to the firm’s website, noting, “over the last nine months macroeconomic conditions have changed dramatically, and the demand we expected to see has slowed significantly.”
Up to this point, Schmitt said demand for Benevity’s solutions and corporate appetite for social impact had been growing “consistently for more than a decade.”
With the move, Benevity joins a growing list of tech companies to shed staff recently as they prepare to navigate what could be a long economic downturn. Just this week alone, a bevy of Canada’s biggest tech companies in Hootsuite, Lightspeed, Clutch, and Clearco, have announced significant layoffs.
Founded in 2008, Benevity is a certified B Corp that offers a suite of community investment, employee, customer, and nonprofit engagement software solutions. Benevity serves over 900 corporate clients, including Visa, Starbucks, and UPS.
Benevity reportedly nabbed a $1.1 billion USD valuation after British private equity firm Hg acquired a controlling stake in the firm in 2020. As part of this deal, Bono’s Rise Fund and Al Gore-led Generation Investment Management also invested in Benevity.
According to Schmitt, up to this point, demand for Benevity’s solutions and companies’ appetite for social impact had been growing “consistently for more than a decade.”
During the early days of the COVID-19 pandemic, Benevity saw a “huge shift” on the part of companies and those firms’ employees toward supporting social and racial justice-related initiatives.
Though giving declined a bit in 2021, Benevity saw new records set for the amount donated through its platform on Giving Tuesday in 2021 and 2022. Amid these conditions, the company brought on a roster of new clients and surpassed $10 billion in total donations.
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To keep pace with this demand and tackle this growth opportunity, Benevity revamped its executive team and embarked on a hiring spree in 2021, growing its ranks to nearly 1,000 employees prior to these cuts. But partway through last year, market conditions began to deteriorate, along with demand for Benevity.
“Although we continue to experience healthy year-over-year growth, the hard reality is that as a company we are overbuilt for current market conditions,” said Schmitt, who described Wednesday as “one of the toughest days in Benevity’s history.”
For her part, Schmitt thinks that “taking the steps now to become a more profitable business will make [Benevity] a stronger company over the long term.”
Despite these cuts and this shift in demand, the CEO added that the she remains confident about Benevity’s long-term opportunity given that “the appetite for companies of all sizes to engage their teams and customers around social impact is still strong.”
Feature image courtesy Benevity.