AfterPay joins global tech cuts, 1,000 jobs affected
Buy now, pay later operator Afterpay is the latest to fall to the tech industry’s mass jobs cuts trend, with a round of layoffs started on Wednesday to affect more than 1,000 jobs globally.
The number of roles affected locally is unknown, but according to the Australian Financial Review roles focused on Afterpay’s global expansion are most likely to be on the chopping block.
The Australian-founded payment tool was bought for $39 billion by US fintech business Block in 2021. Led by Twitter co-founder Jack Dorsey, the company is also responsible for Square credit card reader, music platform TIDAL and payment platform Cash App.
Block has suffered struggling share prices since acquiring Afterpay. Despite the buy now, pay later platform’s success in the Australian market, it has faltered in the global market as rising costs annulling gains in revenue.
In the company’s Q3 2023 earnings call chief financial officer and chief operating officer Amrita Ahuja foreshadowed the cuts with the announcement of a 12,000 people cap, versus Block’s 13,000 head count at the end of Q3.
“We believe constraining team size will enable us to be more effective in how we drive performance in service of our customers and accountability on our business strategies,” she said, indicating that the company expected to reach the cap by the end of 2024.
A Block spokesperson confirmed to Mumbrella that the people cap would impact the entire group (Square, Cash App, Afterpay and corporate) globally, but declined to comment further.
An employee affected by the cuts suggested that AfterPay’s marketing team could have been cut by as much as 60 per cent.
“Afterpay employee here who was cut. If the marketing org was 150 people yesterday, early indications is there may only be ~50 people left,” they posted on Blind, an anonymous soral network that requires users to make accounts with verified company email addresses.
A former Block employee, who now works at Snap, wrote: “ex-Square here. Sorry to hear that, but I think a HC cut is long overdue and it has been dragged out for years.”
The latest round of layoffs come as global technology companies have looked to refocus and cut costs in a slowing economy.
Earlier this week PayPal said it would cut about 2500 jobs or 9 per cent of its workforce, adding to significant cuts at Google, Amazon, Microsoft and EBay in the first month of 2024.
It comes of the back of a slew of lay offs throughout 2023, which ended with Spotify axing 17 per cent of its headcount in December. The final month of the year also saw a 10 per cent cut of Block’s TIDAL workforce.
Block’s shares are down 75 percent since the acquisition, with the company’s Q4 2023 results due on 22 February.
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Two speed economy!! Doesn’t much seem to be impacting construction of Nick Molnar’s mega mansion on Ben Buckler, Bondi. Paid for of course by Afterpay $$’s
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