Major layoffs at prominent digital lending firm Oriente

The Covid-19 pandemic has hit the online lending industry hard. While more people and businesses are seeking loans to make up for lost income, online lenders are seeing defaults spike and slowing down the issuing of new loans.

As a result, these lenders are making drastic moves to survive. In Southeast Asia, startups like Akulaku and Funding Societies had to lay off employees to keep their businesses running. Oriente, a prominent and well-funded online lending firm started by a co-founder of Skype, isn’t spared either.

Skype and Oriente co-founder Geoffrey Prentice / Photo credit: RISE (cc2.0)

The company tells Tech in Asia that it has retrenched a little over 20% of its employees since Q4 of 2019. However, three sources within the firm say that about half of over 2,000 employees will be let go by the first half of this year.

The ongoing cuts, which have been carried out in waves, sweep across its offices in Shanghai, Taipei, Hong Kong, Singapore, Jakarta, and Manila. Its office in Changsha, China, is being shut down.

Oriente’s spokesperson says that not all of the layoffs had to do with Covid-19. Some sales staff were made redundant as a result of technology.

On whether more layoffs are on the way, he adds that due to the uncertainty around the crisis, the company expects more changes in the coming months and has planned for different scenarios. “We hope for the best, but we must plan for the worst,” the spokesperson says.

Cash shortage

Employees tell us that they are unhappy at how the retrenchments have been conducted. “We feel we have not been treated right by HR and the co-founders,” one source says.

The company told affected workers that because of limited resources, it’s asking them to forgo the salary owed to them unless they sign a release agreement to shorten the notice period or accept lesser amounts than what’s stipulated in their employment contracts. They add that the company isn’t forking out severance payments.

The company’s spokesperson denies these claims. “All settlements are determined based on local employment laws and contractual obligations, which are fully honored,” he says, “Our priority has been to make sure those who are impacted are fully supported.”

“All employees are aligned with our revised corporate strategy and united in our efforts to get through this crisis,” he adds.

Regardless, Tech in Asia understands that a top management executive has said in an internal meeting in April that the company expects that some employees won’t sign the release agreements and may even air their grievances with labor tribunals.

However, the spokesman says all affected staff have signed the agreements.

Oriente has been delaying salary payments amid Covid-19. Because of the lockdowns in various cities, it has been unable to run loan issuance and collection, which it primarily does in physical locations like malls and shops, sources say.

Caught by surprise