Hopper's burn and growth rates were unsustainable — even for a company that had raised $730 million.
Hopper, the fast-growing online travel and fintech company, cut 30% of its full-time staff — around 250 employees — in a bid to get profitable, according to a published report.
A spokesperson for the company told Skift the job cuts came in tandem with the twin goals to boost the company’s travel app and B2B businesses, along with being “laser-focused on continuing to build our direct global hotel supply.”
That latter objective became more of a priority when in July Expedia Group removed the hotel inventory it had been supplying to Hopper, and this may have been around half of Hopper’s global supply.
“We needed to make organizational changes to properly support these two critical business objectives,” the Hopper spokesperson said. “Unfortunately, we made the difficult decision to eliminate a number of roles as part of this reorganization. We are deeply grateful to the colleagues we had to part with for their hard work and dedication.”
The Canadian-based Globe and Mail broke the story about the job cuts at Hopper, which is headquartered in Montreal. Lalonde told that publication that Hopper made the moves to trim its burn rate and get profitable.
He added that the cuts came from experimental products that weren’t generating revenue, and that Hopper would reduce its footprint and marketing in several geographies, including some in Asia.
Similar to the way the bottom fell out of the market for SPACs after making their trading debuts a couple of years ago, Lalonde said investors no longer value growth at all costs and want to see profits. “You have to adapt to that new reality,” Lalonde told the Globe and Mail. “Capital is not free anymore, investors have other things where they can get good returns. That is not going away any time soon.”
Hopper has raised $730 million since its founding in 2007.
Just five days before Hopper announced the job cuts to staff, this reporter asked Hopper CEO Fred Lalonde on stage at Skift Global Forum what the company is doing to trim its burn rate. He understandably didn’t mention the layoffs that would happen on Tuesday. [See the video embedded below.]
“We’re investing heavily now,” Lalonde said. “You’ll see in the next couple years, like everybody else, we’re figuring out how to break even. And that’s coming.”
He mentioned “it’s all about creating a balance” as the company’s international footprint expands.
“And as you know, we raised a lot of money,” Lalonde added. “It’s not about the cash that we have in the bank. It’s about building a healthy business that can scale.”
Lalonde said he was monitoring several recent successful IPOs.
“So no IPO in 2024,” Lalonde said. “Look, it’s going to happen eventually. It’s not the priority this year.”
Hopper CEO at Skift Global Forum 2023
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Photo credit: Hopper founder and CEO Fred Lalonde (left) speaking with Skift Executive Editor Dennis Schaal at Skift Global Forum 2023 in New York City. Source: Skift Skift