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One of Canada’s largest private technology companies, Hopper Inc., has cut 30 per cent of its full-time staff in an effort by the online travel services provider to reach profitability.

“We were running a lot of initiatives that were not revenue-generating, we’ve always done that,” said Fred Lalonde, CEO of the Montreal company, in an interview. “But the world has changed, money is no longer free. And we need to move to profitability. There is no magical secret to why we’re doing this, it’s to cut our burn rate and arrive to break even as fast as possible.”

Mr. Lalonde said cuts were primarily to “experimental” products and services Hopper hadn’t launched yet and that none of its offerings in market would be affected. The company will pull back on marketing in some territories, including in Asia, where its eponymous consumer travel-booking app still hasn’t yet gained many customers. But it is continuing to invest in fast-growing areas of its business including expanding lodging offerings.

The layoffs, he added, had nothing to do with a possible slowdown in travel prompted by economic uncertainty, which has prompted other online travel companies including Expedia and TripAdvisor to cut jobs this year. Rather, he said with investors valuing profitable companies rather than those trying to grow at all costs – a reversal from two years ago – “you have to adapt to that new reality.” Hopper is hoping to go public in the next couple of years and “capital is not free anymore, investors have other things where they can get good returns. That is not going away any time soon.”

Hopper’s 250 job cuts, announced at the company Tuesday, are greater in absolute terms than when it cut nearly 50 per cent of its then-340 employees early in the pandemic. The Montreal company joins a slew of other Canadian early-stage technology companies that have made significant cuts to staff this year, including Paper, Talent.com, Hootsuite, Ritual, Symend, Clutch and Clearco. Shopify, Canada’s most valuable technology company, cut 20 per cent of staff in May, after cutting 10 per cent last year.

The tech sector has shed more than 400,000 jobs globally since the start of 2022, according to sector job-loss tracking site layoffs.fyi, as companies have slashed costs to preserve cash and drive to profitability. Several companies have filed for creditor protection or sold for a fraction of their former valuations. The slump began in late 2021 when publicly-traded tech stock prices crashed in anticipation of rapidly rising interest rates, which started in spring 2022 to combat inflation. With rates expected to remain high for some time, many observers expect a continued shakeout in the tech sector.

Hopper has actually continued to flourish amid the tech sector’s travails. The company’s valuation topped US$5-billion in 2022 and this year its revenues surpassed US$500-million, up from US$14-million in 2019. The company has ample cash reserves, Mr. Lalonde said.

The company initially made its name with millennial consumers by building a mobile travel-buying app that predicted the best time to purchase flight tickets inexpensively. It started selling flights, then offered lodging and vehicle bookings as well, through its app.

But Hopper has distinguished itself from other online travel companies by offering a unique set of high-margin ancillary financial products for travelers built using machine learning that leverages vast data sets obtained from travel booking systems. For example, Hopper sells travelers the ability to freeze a flight price for days, buy the right to cancel for a full refund for any reason, rebook a missed connection at no extra charge or change a ticket to a different day without forfeiting its full value. Hopper takes the financial risk for the products, leaning on algorithms to dynamically price its offerings on the go.

Those new offerings enabled the company to quickly bounce back from the pandemic and even double revenues in 2020. The company has since parlayed those products into partnerships with U.S. credit card issuer and Hopper investor Capital One Financial Corp. and Sao Paulo-based digital bank Nubank to power their mobile travel booking services for their customers. Mr. Lalonde is looking to strike similar partnerships globally and Hopper has started partnering with airlines, offering its “cancel for any reason” service to Air Canada customers through the airline’s website.

But the company’s success in capturing a sizeable share of the online travel business has raised hackles from one incumbent rival: in July, Expedia ended a five-year partnership providing lodging inventory to Hopper, saying its ancillary products “exploit consumer anxiety and confuse customers, leading them to purchase services they neither need nor fully understand.”

Mr. Lalonde responded last week at the Skift Global Forum travel conference last week, saying of Expedia: “We have a much better B2B platform, a much better B2B product, and that’s a huge chunk of their business,” “So I don’t think there’s any mystery that that reaction was competitive.”