The tech bloodbath continues as Xero cuts up to 800 jobs
Xero is the latest tech company to make major staff cuts, following Atlassian earlier this week, shedding roughly 15% of its workforce.
Just days after Atlassian cut 500 workers, Xero has announced the removal of up to 800 staff.
The accounting software business made the announcement public on its blog on Thursday morning. It also indicated that the job losses equate to roughly 15% of its headcount. As of September 2022, Xero had 4915 employees globally.
It’s currently unclear how many employees in Australia have been impacted, with Xero declining to divulge specifics.
“The impacted roles are across Xero’s business and affect all markets. We are not breaking down region by region or discussing specific job functions or areas,” a Xero spokesperson said in an email to SmartCompany.
Xero says aspects of the business grew faster than its revenue
This decision comes just five weeks after Sukhinder Singh Cassidy took over as CEO after being announced in late 2022.
According to a company spokesperson, Singh Cassidy will help the company deliver on its strategy and vision.
“Xero has an enormous opportunity to accelerate small business cloud and digital technology adoption around the world, and Sukhinder is very well placed to help Xero realise this,” they said in an email.
It’s unclear whether Xero already had these staff cuts in the works before Singh Cassidy’s official tenure began.
“As we look to the next phase of Xero’s growth, many of you have asked me what change is needed for us to simplify focus, strengthen our execution and balance growth with profitability,” Singh Cassidy said in announcement post.
“I am deeply sorry to be taking this step. I want to make it clear to all Xeros that, as a leadership team and Board, we are responsible for the decisions that led us here.”
“Externally the broader tech landscape favoured high growth in this period; internally, we were less clear and measured in the rate of our hiring and investments.”
“In FY23 we made the decision to slow the rate of incremental headcount growth significantly which has helped, but not enough.”
According to Singh Cassidy, Xero’s headcount, areas of focus, and cost base grew faster than its revenue.
“We aspire to build a higher performing global SaaS company; to do so, we must deliver better for our customers and execute against a disciplined growth framework. This is why we are streamlining and reshaping our organisation.”
Despite this, Xero says it is pleased with its financial results.
“Xero remains well positioned to realise our vision to be the most trusted and insightful small business platform. We are pleased with our half year results posted in November 2022 that point to the continued opportunity for growth in our business,” a Xero representative said in an email to SmartCompany.
“We have also made strong progress in executing our strategy, however to enable the next phase of growth for Xero and drive better customer outcomes, we need to streamline and simplify our organisation.
“These changes will allow us to better prioritise resources to deliver for all stakeholders in both the short and long term.”
Xero also announced that it will be exiting Waddle, a cloud-lending platform it acquired in 2020 for $80 million.
A familiar story
This is becoming a familiar story not just across the broader tech sector. The New Zealand company has a strong presence in Australia. And having this happen two days after Atlassian’s own cuts – its getting increasingly closer to home.
In the last few months we have seen job losses from the likes of Linktree, Mr Yum, Brighte, Swyftx, and Finder.
Similar to Atlassian, Xero’s blog post outlines what the company is doing to assist impacted employees. This includes a minimum of 12 weeks’ pay, six months of healthcare in the US, Visa support and the abiloty to keep their laptops. Xero’s 31 March 2023 RSU shares will also be vested to impacted employees.
This story has been updated to include comments from Xero.
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