GoCardless Cuts Staff by 15% in Push to Profitability

U.K. FinTech GoCardless is slashing 15% of its workforce as it tries to reach profitability.

The company announced the job cuts on its website Tuesday (June 13), saying it wanted to shift its focus to the core areas of its business.

“We have now finalized our plans to focus on fewer things and the resulting reductions to our cost base in order to get to profitability faster,” wrote CEO Hiroki Takeuchi. “These plans will see us reduce our cost base by ~15% and will affect 17% of the roles at GoCardless.”

The company will cut 135 positions while also moving 15 roles from the U.K. to the Latvian capital of Riga, according to the announcement. In total, the changes will shrink GoCardless’ headcount from north of 900 to below 800.

The company will also reduce its senior leadership team by roughly 25%, with Takeuchi saying in the announcement that “a smaller group is more suitable to lead a smaller organization.”

The job cuts and other changes will get GoCardless “within touching distance of profitability in the near future,” he said, per the announcement.

As PYMNTS noted earlier this year, layoffs are a painful but often effective way for FinTechs to reach profitability.

“PayPal, for example, cut spending by $900 million in 2022, partly with layoffs, in anticipation of saving $1.3 billion through 2023, and markets responded well to these moves,” the report said. “Moreover, after Australian-based BNPL platform Zip Co. ceased operations in the United Kingdom and Singapore, it ended the year with $78.5 million in cash and liquidity — and, according to its CEO, Zip will break even by the end of the financial year.”

GoCardless was valued at $2.1 billion last year after raising $312 million in a Series G funding round. More recently, the company debuted a product that lets third-party payment providers allow bank-to-bank payments.

PYMNTS research showed that consumers experiment with account-to-account (A2A) payment tools like peer-to-peer (P2P) apps and mobile wallets, and that their adoption of these payment methods has been steadily growing for years.

In his message to employees, Takeuchi pointed to the rising popularity of A2A payments as one of the things that will help GoCardless reach profitability.

“Over time, I’m really confident that these tailwinds will prevail,” he said in the announcement. “We just need to make sure we position ourselves to take advantage of them.”