Cashback and rewards platform ShopBack has laid off 24 per cent of its workforce or 195 roles “to grow to be extra centered and self-sustainable as a firm”. The announcement was made by co-founder and CEO Henry Chan on the Temasek-backed startup’s city corridor in the present day (Mar 19).

These impacted by the job cuts had been notified inside an hour of the occasion’s conclusion, and the corporate additionally known as off the remainder of the workday. All departures had been saved to the identical day “out of respect and to ease transition for departing crew members”, with their final in-office day as Mar 19, 2024. 

“Undoubtedly, this is among the hardest selections I’ve needed to make in our firm’s historical past,” stated Chan in his message titled On Focus and Sustainability – A Painful Choice posted on the ShopBack web site.

To the ShopBackers who can be leaving us, I’m actually sorry and I acknowledge the difficulties it’ll carry to you. We are going to do our greatest to help you thru this transition with care and compassion.

– Henry Chan, ShopBack co-founder and CEO

Laid-off employees had been supplied pay for at the very least two months of their discover interval, and a further month of severance fee for each full yr of service or based mostly on native statutory tips, whichever is greater.

They will even obtain a bonus equal to a month’s wage, which can be pro-rated if they’re but to finish a full yr of service, in addition to encashed accrued and unutilised depart days.

Moreover, all outgoing employees may have their medical insurance coverage protection prolonged and entry to psychological healthcare help will run till Jun 30, 2024.

These employees will even obtain profession transition help, which incorporates both CV critiques, mock interviews and entry to a skilled coach, or a “profession transition help allowance”, which has been decided in session with the ShopBack’s HR division.

In the meantime, visa holders may have their repatriation prices lined, together with air fare and a finances for shifting bills to “guarantee a seamless transition again dwelling if that’s the possibility (they) are pursuing”.

“A learner and extra agile crew is required for ShopBack’s success”

Between 2021 and early 2022 — a interval when the financial system favored enlargement over sustainability — ShopBack scaled up its crew of 550 to over 900 employees.

Nonetheless, when market sentiments shifted and aggressive progress turned an unsustainable long-term technique in Q2 2022, ShopBack’s focus shifted to value effectivity.

The corporate “explored and exhausted all viable alternate options to scale back prices”, together with reducing again considerably on wage increments and efficiency bonuses, in addition to implementing pay freezes. But, sustainable progress remained a vital problem for the rewards platform.

Therefore, the corporate needed to “slim its focus” over the previous couple of months, and “determine crucial and sturdy drawback areas to excel in over the long run”.

It then turned clear to Chan that a leaner and extra agile crew — considerably totally different from the corporate’s present organisational construction in the present day — can be wanted for ShopBack’s success.

I made the error of pursuing too many instructions as a firm and increasing our crew too quickly. I take full accountability for the choices which have led to this case.

Whereas these course corrections are painful, they’re essential and can set us up for success in the years to return. Due to this, we will develop sustainably shifting ahead. 

– Henry Chan, ShopBack co-founder and CEO

The corporate reported a 20 per cent decline in its income for FY2022/23

Shopback’s announcement comes a month after the corporate reported a 20 per cent year-on-year decline in its income to US$87.7 million for the monetary yr ended March 2023.

Its voucher income fell by greater than half, and the corporate’s losses earlier than tax widened by 29 per cent year-on-year as one-off worker and M&A bills affected progress.

Earlier this month, the corporate introduced it could be discontinuing its purchase now, pay later (BNPL) service, PayLater, from Mar 22 following a periodic evaluate of its enterprise items. 

The corporate first rolled out the PayLater service to Singapore and Malaysia in 2022 after buying BNPL participant Hoolah the earlier yr.

Featured Picture Credit score: ShopBack