ShopBack cuts 195 employees in push for sustainability

TEMASEK-BACKED cashback and rewards platform ShopBack has reduced its employee headcount by 24 per cent, or 195 roles, “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 Tuesday (Mar 19), with those laid off notified within an hour of the event’s conclusion.

The company also called off the rest of the work day. 

All departures were kept to the same day “out of respect and to ease transition for departing team members”, as Tuesday was their last in-office day. 

“Undoubtedly, this is one of the hardest decisions I’ve had to make in our company’s history,” wrote Chan in his message titled “On Focus and Sustainability – A Painful Decision” posted on the ShopBack website.

Laid-off employees were offered pay for at least two months of their notice period, and an additional month of severance payment for every full year of service or based on local statutory guidelines – whichever is higher.

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They will also receive a bonus equivalent to a month’s salary, which will be pro-rated for those who have yet to complete a full year of service, on top of encashed leave days that have been accrued and are unutilised.

All outgoing employees will have their medical insurance coverage extended; access to mental healthcare support will run until Jun 30 this year. These employees will also receive career transition support, which includes curriculum vitae reviews and a “career transition support allowance” determined in consultation with the human resources department.

Visa holders will have their repatriation costs covered, including airfare and a budget for moving expenses, to “ensure a seamless transition back home if that is the option (they) are pursuing”, said Chan.

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

Every existing role within the organisation was reviewed, starting from “the most senior levels”, he said, to determine the extent to which these roles aligned to ShopBack’s future needs.

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

Shopback’s layoffs come a month after the company reported a 20 per cent 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 per cent year on year, as one-off employee and mergers and acquisitions expenses affected growth.

Earlier this month, the company announced it would be discontinuing its “buy now, pay later” service, PayLater, from Mar 22 following a periodic review of its business units.