In a restructuring effort to cut costs, Longueuil-based e-commerce platform operator mdf commerce is once again cutting staff.
Management announced on Monday a reduction in its workforce of around 40 people, the equivalent of 6% of the number of employees.
This announcement is in addition to other cuts made in recent months. Management announced in February that it had reduced its workforce by 10% at the start of the year, while the sale in the fall of the subsidiary InterTrade (around 70 employees) had also reduced the workforce by approximately 10%.
With the downsizing also comes the reduction of the company’s real estate footprint.
Having adopted a hybrid working model, mdf commerce decided that it no longer needed as much office space for its employees, a decision that generated additional savings.
Thus, the company’s offices in Laval were closed in December and the area of the company’s offices at the head office in Longueuil is expected to be significantly reduced. These adjustments are expected to generate annual savings of $500,000.
Management is considering other cost reduction options with respect to its real estate space leases in the United States.
Details are expected in June when the year-end financial performance is revealed, a period covering the months of January, February and March.
mdf commerce employees are based in Canada, United States, Ukraine and China. The company had some 800 employees last fall. They are now approximately 650.
The restructuring will cause mdf commerce to record non-recurring charges of approximately $700,000 in its financial statements. These are mainly costs related to severance pay and contributions to the employee benefit plan. These expenses will be recorded in the results at the beginning of the year, that is to say for the spring quarter which stretches over the months of April, May and June.
The main mdf platforms are those specializing in government procurement and e-commerce, but the company also operates a marketplace platform, including the job site Jobboom and the Réseau Contact dating site.
Mdf commerce shares fell 5.5% on Monday to close the first session of the week at $3.26 on the Toronto Stock Exchange. Over the past year, the stock has fluctuated between $1 and $5. At the current stock price, the company has a market value of 146 million.
The Fonds FTQ (13.6%), Investissement Québec (12%) and the private Connecticut investment firm Long Path Partners (11%) are the three largest shareholders of mdf commerce.