Shopping and rewards platform ShopBack’s CEO Henry Chan announced that the company will be laying off 195 roles which amounts to 24% of its group headcount. Chan described the layoffs as a last resort to become “more focused and self-sustainable” in a blog message.

This move comes on the heels of ShopBack’s decision to end its Buy Now, Pay Later (BNPL) service that takes effect this Friday (22 March 2024) in Singapore and Malaysia. The service was initially launched in July 2022 following its acquisition of BNPL provider hoolah in November 2021.

The company had previously attempted to mitigate its financial pressures by freezing salaries, cutting bonuses, and halting recruitment for over 100 positions, among other cost-saving measures. However, these efforts proved insufficient, leading to the decision to downsize.

Critics may view the layoffs as a delayed response to unchecked expansion, with ShopBack growing its team from 550 to over 900 employees in a short span, without securing a sustainable growth path. Chan took full responsibility for the company’s past directions hints at strategic missteps.

This became especially apparent when ShopBack closed its oversubscribed US$200 million Series F in 2022, receiving backing from entities like Westpac, Asia Partners, and 65 Equity Partners, among others. This funding brought its total to US$350 million to date.

For those affected, ShopBack has outlined a severance package, including extended notice periods, severance payments based on tenure, bonus or commission payments, and additional support like healthcare coverage extension, career transition assistance, and immigration support for visa holders.

Chan’s message also included a pledge to refocus the company’s strategy for 2024, aiming for a leaner, more agile team structure. This restructuring is envisioned to avoid future layoffs and steer the company towards long-term success.

He signed off saying,

“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.

 

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.”

For the remaining team, Chan promised transparency and support as the company navigates through this transitional period, emphasizing a collective effort to emerge stronger from these challenges.

Featured image: Screen grab from The Peak Singapore