MaRS accelerator makes new round of staff cuts

TORONTO – The MaRS Discovery District has eliminated 19 positions, marking the second round of job cuts this year, in line with an attempt to reset the innovation-support organization’s business model under a new CEO. The cuts included eight advisers who work with startups and 11 in legal, information technology, and marketing and communications whose jobs were made redundant as part of a streamlining of the money-losing organization.

The downsizing is intended to help MaRS take “a leaner, more agile approach to build toward a more sustainable business model,” chief executive Alison Nankivell (pictured) told the Globe and Mail. The advisers will be offered the opportunity to continue working for MaRS as independent contractors, she added.

MaRS had already eliminated 20 positions in June including some of its highest-paid chiefs. The latest cuts bring its ranks to 101 people, down from 140 when Ms. Nankivell started her role as CEO in March. It reduces the organization’s senior leadership team to six people, down from 13 before June.

“We were probably overly complicated in our structure at the top, for sure” before the cuts, she said.

The cuts and other cost-saving initiatives will help MaRS cut its annual costs by more than $5-million, down to $22-million, by its March 31 fiscal year end, Ms. Nankivell said, after years of losses owing to declining revenues. As part of the changes, she is looking to run the three distinct operations of the sprawling organization through a more tightly knit “platform.”

MaRS has a real estate arm that holds 1.5 million square feet at the corner of Toronto’s hospital row at College Street and University Avenue, and occupies another 55,000 square feet at Toronto’s Waterfront Innovation Centre building. MaRS leases out much of the space, which includes medical laboratories, to 120 tenants including technology and drug discovery startups, venture capital firms, foreign multinational giants and white-collar service providers.

MaRS also runs a venture capital arm, MaRS Investment Accelerator Fund, on behalf of the province of Ontario. The third part of MaRS, a charity that provides business advisory services, education and market intelligence to help startups grow, is where Monday’s cuts took place and “where we are trying to lean the platform down,” Ms. Nankivell said. Much of the MaRS programming through the charity has historically been covered by provincial and federal funding and supported an array of startups.

Ms. Nankivell wants MaRS to focus on the two core areas that it already supports: health sciences and climate technology. By expanding programming to companies in those areas and working in tandem with the real estate and venture capital arms, she believes MaRS can attract more funding from non-government sources including corporations and philanthropic organizations.

“The core of what we do hasn’t changed. How we do it has changed,” she said.

The CEO appointment of Ms. Nankivell, who previously led fund investments and global scaling for Business Development Bank of Canada’s private capital arm, was announced in December. She said at the time that she didn’t think MaRS needed foundational change, but “more of a nudging of certain aspects of the overall programming and partnership with the community in certain directions of emphasis.”

But she admitted Monday that she “had an assumption about how things operated, and when I got here, I realized there wasn’t as much platform thinking as I would have thought. I’ve had to work hard to pull that together.”

The key question is whether the refocusing can help MaRS revive its non-government revenues, which have dropped substantially since 2019, the year before the pandemic began. Revenues from sources other than federal and provincial grants, including fees for services to startups, donations and event sponsorships, fell to $10.1-million in its fiscal year ended March 31, 2023 (MaRS has yet to report fiscal 2024 results), from $29.1-million four years earlier.

Revenues other than those from any form of government funding dropped by 32.7 per cent over the same period. But employee costs had nudged up before this year’s cuts. After some uncertainty over its continuing government funding, MaRS recently had its core funding from Ontario renewed until 2028.