ASX-listed accounting software company Xero is shedding up to 800 staff amid a wave of tech company job cuts.
Xero CEO Sukhinder Singh Cassidy publicly announced the layoffs on Thursday, saying her company has made the “difficult decision to remove 700 to 800 roles across Xero”, affecting 15 per cent of the organisation.
“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,” she said
“Today’s news affects everyone at Xero, but most of all it affects the many talented colleagues and friends who have contributed so much to Xero and whose roles are potentially impacted.”
Like much of the tech world, Xero went on a hiring blitz during the pandemic, meaning the job cuts bring the company’s headcount back to where it was circa September 2021.
In a call with investors, Singh Cassidy said there is going to be “org redesign work and a deeper evaluation of our tech functions” over the next three months. She also clarified that the job losses were general, rather than specific, reaching “across all functions and across all regions”.
Staff who lose their jobs from the New Zealand-based company will get a minimum of eight weeks’ severance pay on top of at least four weeks’ notice, vested shares and bonuses, their laptop, and an extra three months of access to Xero's employee assistance program.
Xero expects the “restructuring charges” to cost between $25 million and $35 million.
“I know everyone will experience a variety of emotions upon hearing this news,” Singh Cassidy said.
“This includes many of the leaders who are here to support you and are absorbing the news themselves in parallel.”
On the ASX, investors took kindly to the “difficult decision” made by Xero management, jumping 10 per cent on Thursday’s trading, up around $8.20 per share to $86.89.
Along with the job cuts, Xero said it will cut ties with Australian lending software company Waddle which it acquired in 2020. Xero will write down between $30 million and $40 million of assets to sever ties with Waddle.
This is the latest antipodean company to announce large scale job cuts following news that Australian tech giant Atlassian would shed 500 staff just months after it went on a literal recruitment drive.
Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes also described their company’s job cuts as a “difficult decision” that will target specific areas including its talent acquisition, program management, and research and insight teams.
