ShopBack Cuts 24% Of Staff



ShopBack has declared its intention to eliminate 195 positions from its workforce, which equates to 24% of the total number of employees.

CEO Henry Chan provided more background on the reasoning behind this choice in a statement regarding the reduction. ShopBack first increased the size of its team from 550 to over 900 in 2021 and the first part of 2022. Eventually, the group’s focus shifted to cost optimisation as market sentiments changed from the second quarter of 2022 and ambitious growth turned out to be an unsustainable long-term plan.

Related link: Paytm Will Eliminate 20% Of Workers Once Business Halts

The team “explored and exhausted all viable alternatives to reduce costs” before the reduction, which included:

  • Eliminating welfare budgets, performance bonuses, and salary increments;

  • Putting in place pay freezes and performance bonuses for leaders; Introducing compensation cuts for senior leaders;

  • Reducing backfills and filling only purely critical tasks resulted in the removal of over 100 full-time positions for which ShopBack was hiring

  • Introducing stricter organisational requirements for efficiency and cost-effectiveness.

Sustainable growth has remained a difficulty since 2022, despite these cost-cutting measures.

Related link: Barclays To Lay Off Hundreds Of US Consumer Bank Staff

In order to succeed in the long run, Chan said: “We have narrowed our focus over the last few months, identified critical and durable problem spaces, and established a more efficient operating rhythm to keep us on track.” As a firm, we now have a more defined plan for 2024 and beyond, along with a sizable cash reserve to support it.”Then it dawned on me that in order for us to succeed, we’ll need a leaner, more agile team, which is very different from our current organisational structure.”

ShopBack’s strategy for managing the personnel reductions began with a complete redesign of the organization’s lean organisational structure, which will allow the team to execute on its plan. Next, it examined every role that now exists inside the company, working up to the highest positions, to see how well they match future requirements.

Related link: H&M Closes 20% Of Spanish Stores, Fires 588 Workers

“Ultimately, I decided on a more substantial reduction to minimise the chances of us ever having to do this again.”
ShopBack is offering the following increased severance package to assist impacted employees during this temporary period:

The duration of notice is: Employers will pay affected employees for at least two months of their notice period, according to the notice terms specified in their employment contracts or local statutory guidelines, whichever is longer.

Related link: Nokia Will Lay Off 14,000 Workers As Profits Drop

Severance payment: Those impacted will also get one month’s worth of severance compensation for each year they worked there, up to the maximum amount determined by local statutory requirements.

Payment of commissions or bonuses: If you haven’t yet finished a full year of service, they will receive a prorated bonus equal to one month’s salary. The Sales Commission Scheme will provide members of the sales, marketing, and development teams with the commission they are entitled to (calculated to the end of Q1 2024).

We encash leave: The company will redeem accrued and unused maternity/paternity leave, birthday leave, accumulated and unutilized yearly leave, and off-in-lieu leave (where applicable, as of last date of work).

Related link: Amazon Begins Layoffs In Its HR & Cloud Divisions

Learning and development: To support their ongoing education, affected personnel will get an Individual Development Plan (IDP) Budget for the entire year.

Healthcare: In places where it is currently offered, they will also receive extended medical insurance coverage through June 30, 2024, according to terms set by local insurance providers. They will have access to mental health services until June 30, 2024.

Related link: Expedia Will Let Go Of 9% Of Its Staff

Vesting of ESOS: Employees’ ESOS grant(s) will vest faster and faster until they reach the next tier.

Assistance in career transition: As stated in the statement, providing new work options for team members departing ShopBack is a primary goal. Those impacted will receive support in the form of either:

  • Career transition support allowance, as predetermined by their leader in consultation with HR

  • Mock interviews, professional coaching, and CV evaluations, depending on where they are located.

For immigration assistance: We will reimburse repatriation costs, including flights and a budget for relocation expenses, to visa holders impacted by this news. This will facilitate a smooth return home if they decide to pursue this option. The HR departments at ShopBack will also be on hand to offer guidance on immigration and visa issues.

Related link: Cisco To Lay Off Over 4,000 Workers, Decrease Revenue Prediction

According to Chan, the final day of work for team members departing was Tuesday, March 19, 2024. A meeting was held later that day to notify the impacted individuals of their formal last day of employment.

Leave a Reply

Your email address will not be published. Required fields are marked *