New Zealand-founded Xero is reducing 700 to 800 roles across its organisation in an effort to reshape its structure.
Part of its plan also includes exiting cloud-based lending platform Waddle, which it acquired in 2020 that will incur a $30 to $40 million write down in FY23.
“These are difficult but necessary steps as we work to further strengthen Xero for the future, while carefully balancing the interests of all our stakeholders,” CEO Sukhinder Singh Cassidy said.
“We don’t take these decisions lightly and we recognise today is a hard day for our people. Today’s announcement does not take away from the significant contributions of everyone at Xero. We take our purpose and values seriously, and are committed to working closely with each impacted employee and providing them with the right level of support.”
The headcount reductions will improve Xero’s operating profitability as its operating expense-to-revenue ratio is expected to reduce significantly for FY24.
In a statement to shareholders, publicly listed Xero said these changes will allow the company to better prioritise resources to deliver for all stakeholders in the short and long term.
“As we aspire to build a high-performing global SaaS company and to enable Xero’s next phase of growth and drive better customer outcomes, we need to streamline and simplify our organisation,” Singh said.
“These changes, and our decision to re-invest in key strategic areas, will adjust our operating cost base as we balance growth and profitability while taking a robust approach to capital allocation that supports long-term value.”