In a bold move aimed at fostering long-term sustainability, ShopBack, a leading cashback and rewards platform backed by Temasek, announced a significant reduction in its workforce. Henry Chan, co-founder and CEO, shared the decision, which affects 24% of its staff or 195 employees, during a company town hall on March 19. This step is part of ShopBack's strategic effort to streamline operations and ensure the company's future resilience.
A difficult choice for future stability
Henry Chan described the decision as one of the most challenging he has faced in ShopBack's history. The announcement, titled “On Focus and Sustainability—A Painful Decision,” posted on the company's website, underscores the gravity of the situation. Employees affected by the layoffs were informed shortly after the town hall, and the company paused operations for the rest of the day to respect the departing team members.
ShopBack has committed to supporting its outgoing staff with a generous severance package. This includes at least two months' pay for the notice period, an additional month's severance for each year of service or, according to local statutory guidelines, whichever is higher, and a bonus equivalent to one month's salary. Moreover, employees will receive compensation for accrued leave days and extended medical insurance coverage until June 30. The company also promises mental health care support and career transition assistance, including CV reviews and a support allowance.
Addressing the reduction with care and strategy
The approach to the workforce reduction was meticulous, involving a complete overhaul of the organisational structure to align with ShopBack's vision for sustainable growth. Roles were evaluated from the top down to ensure that the remaining positions were crucial to the company's strategic objectives. Chan's memo highlighted the thorough and sometimes intense deliberations behind each decision to minimise future disruptions.
This restructuring follows a challenging financial year for ShopBack, with a 20% decline in revenue to S$87.7 million for the year ending March 2023. The company also saw its losses before tax widen by 29% year-on-year, partly attributed to one-off expenses. The move comes shortly after ShopBack announced the discontinuation of its “buy now, pay later” service, PayLater, as part of a regular assessment of its business units.
Navigating through challenges towards sustainability
ShopBack's decision to reduce its workforce reflects a broader trend among tech companies to adapt to economic pressures and changing market dynamics. By taking a proactive approach to reorganisation, ShopBack aims to establish a leaner structure that can more effectively pursue sustainable growth. As the company navigates through these changes, it remains committed to supporting its employees through this transition, demonstrating a responsible approach to a difficult situation.
