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Photo from ShopBack

ShopBack slashes 195 jobs in cost-cutting overhaul

Laid-off workers will receive severance pay and more.

ShopBack will remove almost a quarter of its staff as part of its efforts to become a “more focused and self-sustainable” company.

CEO Henry Chan said ShopBack had to reduce its headcount by 24% of 195 roles to attain sustainable growth and reduce costs.

“From 2Q22, when market sentiments shifted and aggressive growth became an unsustainable long-term strategy, our focus turned to cost efficiency,” Chan said.

The CEO said the company has also exhausted all variable alternatives to reduce costs, such as cutting back significantly on salary increments, performance bonuses, and welfare budgets and Implementing pay freezes, but still failed to reduce costs since 2022.

“Over the past few months, we narrowed our focus, identified critical and durable problem spaces to excel in over the longer term, and established a more effective operating rhythm to keep us on track. As a company, we now have a clearer strategy for 2024 and beyond and a healthy cash reserve to get us there,” Chan said.

“It then became clear to me that a leaner and more agile team – significantly different from our current organizational structure today – will be needed for us to succeed,” Chan added.

Laid-off workers will receive pay for at least two months of their notice period, in line with notice periods as per their employment contract or local statutory guidelines, whichever is longer;  one month of severance pay for every full year of their service or based on local statutory guidelines, whichever is higher;  and bonus equivalent to one month pay, which will be prorated if they have yet to complete a full year of service.

ShopBack will also grant laid-off words leave enhancement, a full year's worth of Individual Development Plan (IDP) Budget, and extended medical insurance coverage and continued access to mental healthcare support until 30 June. 

“I made the mistake of pursuing too many directions as a company and expanding our team too rapidly. I take full responsibility for the decisions that have led to this situation,” Chan wrote.

“While these course corrections are painful, they are crucial and will set us up for success in the years to come. Because of this, we will be able to grow sustainably moving forward,” Chan added.
 

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