Cites cost-cutting measures in "temporary" layoffs of 15 per cent of the staff at its head office.
Citing difficult market conditions, DavidsTea has announced the “temporary” layoffs of 15 per cent of the staff at its Montreal head office.
In a communiqué Thursday, the company said it was implementing several cost-cutting measures “on the road toward profitability.”
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It was not immediately possible to determine how many jobs will be affected by the announcement. The company has announced a plan aimed at adjusting the “costs structure in the context of persistent macroeconomic uncertainty.”
The firm noted that there had been a 25-per-cent drop in fourth-quarter sales ending Jan. 28 compared with the previous year, which would be around $29 million to $31 million.
“Like many other retail brands, we have experienced difficult market conditions during the fourth quarter, consumer spending has been affected by inflation and the increase in interest rates, which has reduced demand,” said Sarah Segal, company CEO and brand chief.
The company firmly believes in its long-term growth plan. It reported a cash balance of about $22 million and “no debt and strong working capital.”
The company is expected to provide more details on its costs-control plan during the announcement of fourth-quarter results for 2022 scheduled for April 28.
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