Calgary tech firm Benevity lays off 137 workers, cites poor market conditions

A pedestrian walks through downtown Calgary on Dec. 9, 2020. THE CANADIAN PRESS/Jeff McIntosh

A Calgary tech company says weak market conditions are to blame for its decision to lay off 14 per cent of its workforce this week.

Benevity, a company that provides transaction processing services for charitable campaigns, announced the news on Wednesday, saying that a previous decision to "significantly increase" its workforce may have been premature.

"The hard reality is that as a company we are overbuilt for current market conditions," said CEO Kelly Schmitt in an online statement.

"With that, we have made the difficult decision to reduce the size of our team by 14 per cent, and today we are saying goodbye to 137 passionate Benevity-ites in the process.

"I am truly sorry that we've come to this point, and I take full responsibility for the decisions that led us here."

Schmitt says each employee who is being laid off will be meeting with senior leaders to discuss transition options. She says those workers will be offered extended health benefits, career transition support, ownership of company laptops and "generous severance" packages.

"To our teammates who are leaving today, we are truly grateful for your contributions to Benevity, our culture and our moonshot – we are proud of the impact that we have made together," she said.

'TECH SECTOR IS NOT IMMUNE'

The Alberta NDP says they are disappointed to hear of the news of the layoffs at Benevity.

In a statement, economic development and innovation critic Deron Bilous said the news is difficult to hear in the midst of the affordability crisis.

"Our economy is facing headwinds as we head into 2023, and despite growth in the last couple of years, the tech sector is not immune. The layoffs at Benevity follow reports of layoffs at other Calgary-based tech companies in recent weeks," he said.

Bilous also pointed some of the blame at the UCP government.

"Rather than supporting the tech sector, the UCP declared economic diversification a luxury and cancelled tax credits that created instability in the sector and drove out investment.

"As a result, tech investment continues to lag much of the rest of the country and fails to keep pace on a per capita basis."

Meanwhile, the Alberta goverment blamed the job losses on the federal government and the inflation crisis it claims it created. The province also pointed to the steps it has taken to help Albertans.

"Our government has responded with the largest inflation relief package of its kind in Canada. This includes fuel tax relief, and consumer protection for the costs of utilities, as well as targeted financial support of $600 over six months to families, seniors and vulnerable Albertans to help deal with the rising cost of living," said a statement from the office of Jobs, Economy and Northern Development Minister Brian Jean.

It also said there are supports for Albertans who have been laid off and opportunities for residents who seek to "transform their skills."

"Alberta’s tech sector is growing rapidly, and as demand for skilled workers grows, we want to be on top of providing Albertans with every opportunity to level up their skills and take part in this expanding industry. We are helping Albertans take advantage of every opportunity by building a business-friendly climate that encourages investment and growth across industries, including in technology," the statement read.

Benevity set up shop in Calgary in 2008, offering charitable-donation management and grant-management platforms to businesses. It is one of Western Canada's largest tech startups.

Its head office is located in Bridgeland.