- Sezzle (SZL) says it will cut its workforce in order to continue the business for long-term growth and establish a path toward profitability and free cash flow
- The cut results in the termination of approximately 20 per cent of staff in North America, across nearly all business operations to streamline reporting structures and create clearer lines of accountability
- Sezzle expects to achieve around US$10 million (A$13.6 million) of annual run-rate cost savings and to incur about US$500,000 (A$680,000) in one-time cash charges that will be recorded in FY2022
- The decision follows a proposed takeover by Zip Co (Z1P) announced last month
- SZL shares are up 5.12 per cent, trading at $1.54
Buy now, pay later company Sezzle (SZL) will undertake significant cuts to its workforce in order to position the business for long-term growth and establish a path toward profitability and free cash flow.
It will cut about 20 per cent of positions in North America across nearly all business operations to streamline reporting structures and create clearer lines of accountability.
The move comes after it was announced last month that Sezzle would be taken over by fellow buy now, pay later operator Zip Co (Z1P) in a deal that valued Sezzle at $491 million.
“Sezzle has experienced significant growth in its history and is now at an important juncture, as we look to take decisive steps toward profitability and free cash flow,” CEO and Executive Chair Charlie Youakim said.
“Sezzle’s growth prospects remain unchanged, and these actions position the company to maximise its long term success.”
Once the reduction is implemented, Sezzle expects to achieve around US$10 million (A$13.6 million) of annual run-rate cost savings in salaries and salary benefits. The decision is expected to result in approximately US$500,000 (A$680,000) in one-time cash charges that will be recorded in FY2022.
The market reflected optimism with the news as SZL shares were up 5.12 per cent, trading at $1.54 per share at 10.40 am AEDT.