In an internal email obtained by Bay Street Bull, the Canadian jewellery brand Mejuri announced a 10 percent cut of its employees, representing 50 members of its international workforce. CEO Noura Sakkijha said in an internal email Wednesday that the layoffs came in the face of decreased consumer spending, increased operational costs from inflation, and global supply chain disruptions that have been wreaking havoc on industries since COVID-19’s emergence in 2020. Management had laid off individual employees privately prior to the company-wide email, which they said was necessary given the “macroeconomic climate.”
Despite steady growth last year, the company says these issues have led them to reforecast target earnings, cut budgets across the board, reduce hiring plans, and narrow their focus on gross margin improvements. Sakkijha said despite these efforts, cuts, and restructuring around key investment areas were necessary to maintain long-term stability to the business given the uncertain economic climate.
The restructuring eliminates jobs that are “duplicative, have substantial overlap or roles that support areas that are deprioritized,” and the company claims everyone impacted received “a generous severance, extended benefits, and an extended options exercise period.”
“Our team is incredibly talented, hardworking, and dedicated, and I am forever grateful for the contributions they have had on our business. It is our responsibility to react in difficult times and to do what’s best for the long-term health of our business.”
Read the full internal company email from CEO Noura Sakkijha below.
I want to share with you an important update: today we made the difficult decision to part ways with 10% of our team due to a restructuring of our business given the current macroeconomic climate. Those who were directly impacted by these changes have already been contacted. Our team is incredibly talented, hard working, and dedicated, and I am forever grateful for the contributions they have had on our business. It is our responsibility to react in difficult times and to do what’s best for the long term health of our business.
As you all know, we value transparency, since the beginning of the year we’ve been sharing these challenges and updates with you. In Q4 of last year, not too long ago, everything was on an upward trajectory. Consumer spending was strong, public markets were strong, and availability of capital was strong. Companies were being rewarded for high growth. Everything took a turn earlier this year, the macro economic challenges started to manifest themselves in reduced consumer spending, increased costs due to inflation and supply chain disruptions. Our entire strategic plan, priorities and forecasts had to adapt to the current climate. The combination of lower revenue and increased costs of operations in the first half of the year really impacted our financial health and outlook.
As you may recall, in an effort to minimize the impact, we reforecasted our revenue targets down, we cut budgets across the business, reduced our hiring plan, focused on prioritizing gross margin improvements and rolled out our new pricing architecture. However, those efforts have not been enough to mitigate the impacts we are seeing from the macroeconomic climate. Depending who you ask they will tell you we are in or are approaching a recession and it is unclear how long the recovery period will be so this restructuring is meant to support us during this uncertain time.
I recognize that this is a lot to digest but I want you to know that despite the challenges our brand is poised to win. We’ve built an incredible value proposition for our customers, a loyal and growing customer base, and we continue to launch products and experiences consumers love. This economic climate provides us with an opportunity to drill down on what really matters to our customers and to set ourselves up for long-term success. As we move forward, and navigate the current climate, my focus is simply to ensure that we continue to grow our brand in a sustainable manner. The decisions business leaders take in difficult times will decide whether their business thrives, survives or dies. Today, that means restructuring certain aspects of our business to be more focused around key areas of investment that will have a long term impact on our business.
The restructuring eliminates roles that are either duplicative, have substantial overlap or roles that support areas that are deprioritized. An example would be how we have restructured Customer Happiness (CH) to leverage a hybrid model between internal team members and an external agency to consistently provide fast service. The hybrid model allows us to respond to changes in ticket volume quickly, expand across multiple time zones, and add additional languages to support our international expansion.
We have always been invested in our team and have prioritized sharing the wins with you, whether through our recently expanded Options program, improved benefits with the scale of the business, and most recently offering a share buyback opportunity for long-tenured employees as part of our recent round of funding. In the same ethos, we want to do our best to support the team members we have parted ways with in this time of difficulty. We have provided everyone who is impacted generous severance, extended benefits, and an extended options exercise period.
As a third generation jeweler and a co-founder of this business, I am committed to never giving up, to taking responsible actions to make sure our company becomes a global mainstay brand for years to come and I know that none of this will be possible without your passion and support.
Thank you for being with us on this journey, and for giving your best each and every day to build the fine jewelry brand that redefines luxury and empowers our community to invest in themselves. This team is truly amazing and I know that together we are going to thrive.
We will have an opportunity to discuss all of this during our upcoming town hall next week. In the meantime, if you have any questions please contact your manager or your People team partner. We are here for you and our doors are always open.