Another round of cuts at Seattle-based cannabis website Leafly brings the company’s layoffs this year to more than 50% of its workforce. The culling last week, which lopped off a whopping 91 employees, follows a previous downsizing of 54 employees in January, according to Yahoo Finance.
Leafly CEO Tim Leslie, formerly an executive at Amazon Prime Video, said in a press release that “COVID-19 has rocked global financial markets and put further capital investments we were expecting on pause.” The move comes amidst a wave of pandemic related downsizing, with recent figures showing that a record 3.3 million people filed for unemployment in one week earlier this month. CNBC reported a prediction today that most economies will go into a “deep freeze” lasting up to six months.
With new investments on pause, Leslie said the layoffs will “allow us to be financially self-sufficient so we can continue to help consumers and patients learn about and order cannabis online while providing cannabis retailers and brands the services they need during this global crisis." The news was first reported last Monday on Twitter by Ben Adlin, a former Leafly employee, and was confirmed in a statement by the company.
The layoffs included high level staff like Jo Vos, Managing Director for Leafly Canada, who announced her departure on twitter. As expected, former employees began to leave angry feedback Leafly’s Glassdoor profile shortly following the layoffs, some containing sharp criticism of company executives.
hearing reports from workers that @leafly is laying off 91 employees and giving them one week of severance pay. i've called leafly's pr person to confirm.
“Leafly is done for,” wrote one former employee. “The Leafly that I (and countless others) fell in love with no longer exists. Rather, there’s a revolving door of senior leadership that has no cannabis experience nor cares about learning even the fundamentals of cannabis or cannabis culture.”
The cuts at Leafly come in a longer trend of slower-than-expected growth for the company. Last October, after it had spent the year doubling its workforce to roughly 300, management put a freeze on hiring and cut back on non-essential expenses.
At that time, Leslie issued a statement saying: “This is an exciting time at Leafly. We're growing, and we're going to continue to grow.” Earlier this year, when the company cut nearly 20% of its workforce and then closed its operation in Germany, Leslie said the cuts were meant “to more closely align our business operations with the market realities of the technology and cannabis sectors.”
Geekwire also reports that while Leafly has seen a decline, Wikileaf and Weedmaps have seen an increase in site traffic. Recent growth reports for the cannabis industry provide more evidence that the Leafly downsizing is in line with wider trends and not just a COVID-19 fluke.
Earlier this month, Business Insider reported that the North American Marijuana Index had fallen by 50% this year, and observed that “the once red-hot cannabis industry is coming back down to earth.” Founded by former Kelly Blue Book employees in 2010, Leafly was acquired in 2011 by Privateer Holdings, a private equity firm that specializes in cannabis. The company spun off to become independent in 2019, and raised another 2.3 million dollars in a round of funding last November.