Kitchener-Waterloo

Federal government wants its money back after Waterloo smart glasses maker North lays off workers

The federal government has stopped investment payments to Waterloo's North, Inc., formerly Thalmic Labs, due to layoffs at the company.
Aaron Grant is one of three co-founders of North, the company behind Focals smart-glasses. He tweeted at a potential customer concerned about recent layoffs that "we are certainly not" about to go out of business. (Marc Baby/CBC)

The federal government has stopped investment payments to Waterloo smart-eyewear maker North Inc. after the company laid off workers. 

"We are concerned and disappointed by the announcement of layoffs at North, and our thoughts are with the workers and their families," Innovation, Science and Economic Development Minister Navdeep Bains said in a statement emailed to CBC Kitchener-Waterloo.

North Inc. received $24 million from the federal government in November 2018 to create 230 new jobs, mostly in Waterloo region.

Now, officials with Bains' office say the department is working to recoup money it's already given to the company.

The company would not say how many people have been laid off.

Bains noted the government's investment was a loan that was to be repaid.

"All future payments have been suspended. We are currently in discussions with the company to establish the best path to repayment, while protecting existing jobs," Bains said.

Bains said Canadians expect the government to invest in ideas and build "globally competitive companies" to create jobs.

"That necessarily comes with an element of risk. But the price to pay for failing to innovate is far greater," he said.

Company faces 'tough decisions'

North Inc., formerly known as Thalmic Labs, transitioned to making smart glasses at the end of 2018. It had previously developed a motion-controlled device called the Myo armband.

The smart glasses are called Focals and carried a $1,299 price tag until earlier this month, when the price dropped to $799.

"This new pricing structure better reflects what customers expect from eyewear," the company said in a release. "Customers who previously bought at the original price point will receive a refund for the difference in price."

The company has set up stores in Toronto and New York City, N.Y. and has plans for pop-up shops in Seattle and San Francisco. The product was also featured at the Consumer Electronics Show in Las Vegas last month.

A company spokesperson declined CBC K-W's request for an interview and instead sent a statement from one of the co-founders, Stephen Lake.

In it, Lake says the company made "big bets" in reachers and development, manufacturing and retail as they brought Focals to market.

"Those risks were the right choices at the time and helped us create a product that set a new bar in our category of everyday smartglasses," he said.

Now, the company is "faced with some tough decisions."

"We decided to lay off a number of employees last week in order to focus our resources and ensure we have sufficient runway to execute on our upcoming milestones over the next 18 to 24 months. This was a difficult decision, but a necessary one to ensure long-term success," Lake said.

Lake also said the company will continue to be headquartered in Kitchener-Waterloo, and "we still plan to grow and build here over time."

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