Hopper lays off 250 employees, including about 20 in Montreal

Travel app Hopper has laid off nearly 250 employees, or 30 per cent of its workforce, as the technology sector continues to face challenges.

The announcement had "little impact" at the Montreal head office, said a company spokesperson, who said, "The vast majority of employees were in the United States or abroad. More specifically, only 20 Montreal employees were affected."

The news was first leaked to the Globe and Mail. The layoffs were related to products and services in research and development.

"We were running a lot of initiatives that were not revenue-generating. We've always done that," explained the app's CEO and co-founder, Frédéric Lalonde, in an interview with the Globe. "But the world has changed. Money is no longer free. And we need to move to profitability. There is no magical secret to why we're doing this. It's to cut our burn rate and arrive to break even as fast as possible."

The business environment has deteriorated for technology start-ups. Many investors did not hesitate to finance promising growth companies in the hope of future profitability. With rising interest rates, investors are more reluctant to put their assets into a company that is not profitable.

This trend has affected several technology companies in Canada, particularly in Montreal.

In July, Montreal-based telemedicine specialist Dialogue accepted a takeover offer from insurer Sun Life. Dialogue's co-founder and CEO, Cherif Habib, had mentioned in an interview that the market context made it difficult to obtain the necessary financing for its expansion plans: "Going into other markets is something that takes a lot of capital, and in a public company environment where investors expected certain returns, it was difficult to make these investments."

In February, Google Canada announced it was eliminating some 20 positions at its Montreal office. In January, cloud commerce specialist Lightspeed announced it was eliminating 300 positions to reduce its operating expenses by 10 per cent.

Despite the layoffs, Hopper continues to focus its "full attention" on building a direct hotel offering, the company said. It wants to become a "complete" travel platform with its app and direct business partnerships.

Last week, at a presentation at the Skift Global Forum in New York, Lalonde said that Hopper had raised "a lot of money" and that he was "absolutely in no hurry" to take his company public. "It will happen eventually, but it's not a priority this year."