Xero cuts up to 800 jobs as industry downturn deepens

Accounting software maker Xero is the latest tech company to announce major job cuts, telling investors on Thursday it would cut up to 800 jobs.

ASX-listed Xero employed 4,915 people as of September last year, according to the latest company filings, meaning the cuts represent about 16 percent of its global workforce. It is not yet clear how many posts in Australia will be affected.

Xero CEO Sukhinder Singh Cassidy said the job cuts were

Xero CEO Sukhinder Singh Cassidy said the job cuts were “difficult but necessary steps.”Credit:AFR

The move underscores the deepening downturn in the tech sector, which surged during the pandemic amid record-low interest rates and intense investor demand but has now returned to earth. Australia’s top tech company, Atlassian, said earlier this week it would cut about 500 jobs.

Investors welcomed cost cuts from Xero, whose shares rose 9.8 percent to $78.62 after the announcement. The stock had fallen from a high of $154.47 in November 2021 to $79.62 by Wednesday’s close and hit a low of $70.11 earlier this year.

In a statement to the ASX, Xero said the job cuts, which will affect between 700 and 800 jobs, would help streamline its business and improve profitability.

Xero chief executive Sukhinder Singh Cassidy, who took the helm just last month, said the decision was not taken lightly. In a message to employees — dubbed “Xeros” — on Thursday, she said she deeply regrets the move. “As the leadership team and board, we are accountable for the decisions that got us here,” she said.

‘Externally, the broader technology landscape favored strong growth during this period; Internally we were less clear and measured by the rate of our investment in hiring.’

Sukhinder Singh Cassidy, Xero chief

A consultation process with potentially affected individuals would begin next week, but “it may take up to four weeks for some individuals to have this conversation,” she said.

Speaking to investors on Thursday, Singh Cassidy said the cuts would extend to all Xero functions and regions. “I will of course note that in some regions and some areas we have proportionally higher headcounts, so you can assume there will be some proportionality there,” she said.

https://www.smh.com.au/business/companies/xero-axes-up-to-800-jobs-as-tech-downturn-deepens-20230309-p5cqmz.html?ref=rss&utm_medium=rss&utm_source=rss_business Xero cuts up to 800 jobs as industry downturn deepens

Brian Lowry

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