ShopBack cuts 24% of staff in push for sustainable growth

Photo credit: Shopback

Temasek-backed cashback and rewards platform ShopBack has reduced its employee headcount by 24% – cutting out 195 people – “to become more focused and self-sustainable as a company.”

The shock announcement was made by co-founder and chief executive Henry Chan at the company’s town hall on March 19. Those slated to be laid off were notified within an hour of the event’s conclusion.

All departures were enforced for the same day “out of respect and to ease transition for departing team members.” The last in-office day for affected staff is March 19, 2024.

“Undoubtedly, this is one of the hardest decisions I’ve had to make in our company’s history,” wrote Chan in a message posted on the ShopBack website.

Affected employees were offered payment for at least two months following their notice period. They will also be given an additional month’s salary as severance pay for every full year of service – or based on local statutory guidelines, whichever is higher.

Retrenched employees will also receive a bonus equivalent to one month’s salary, though this amount will be pro-rated for those who have yet to complete a full year of service. Unused leave days will be encashed as well.

All outgoing employees will have their medical insurance coverage extended, and access to mental healthcare support will run until June 30, 2024. Employees will receive career transition support, too, which includes either curriculum vitae reviews or a “career transition support allowance” determined in consultation with the company’s human resources department.

For visa holders, the company will cover costs for repatriation, which include airfare and a budget for moving expenses.

In his note, Chan disclosed that ShopBack approached its headcount reductions by “redesigning from scratch a reorganized and lean organizational structure” that would enable it to deliver on its strategy for sustainable growth.

Every existing role within the organization was reviewed to determine if they aligned with ShopBack’s future needs, he said.

“Ultimately, I decided on a more substantial reduction to minimize the chances of us ever having to do this again.”

ShopBack’s layoffs come a month after the company reported a 20% decline in its revenue to US$87.7 million for the financial year ended March 2023. Voucher revenue fell by more than half.

The company’s losses before tax also widened by 29% year on year, as one-off employee and mergers and acquisitions expenses affected growth.