The redundancies will affect posts in the U.K., U.S., Australia and New Zealand, reducing senior leadership by 25% and taking the company’s total workforce to just under 800. A separate 15 roles will be transferred from Britain to Latvian capital Riga.
Founded in 2011, London-headquartered GoCardless processes direct debit payments — recurring transactions withdrawn from a customer’s bank account for things like subscriptions and invoices — for its business clients.
The cuts are part of the company’s plans lower costs by 15%, CEO Hiroki Takeuchi said Monday in a statement, adding that the GoCardless business strategy will not be changing “fundamentally.”
The payments firm most recently raised $312 million in a Series G funding round in February, earning a $2.1 billion valuation. Its backers include Alphabet’s venture capital investment arm GV, BlackRock and Permira.
Takeuchi painted an optimistic picture for the firm’s prospects despite the layoffs.
“We can see that our revenue will continue to grow strongly, and the changes we are announcing today will get us within touching distance of profitability in the near future. This will make us one of very very few technology companies that is generating hundreds of millions of dollars in revenue, growing fast, and being profitable,” he said.
The decision comes amid rising pressure in the tech startup sector, where funding has been skydiving and remains on track to shed another 39% to just 51 billion in 2023, down from $83 billion in 2022, according to venture capital firm Atomico.
Takeuchi hinted at the firm’s renewed focus on profitability to CNBC in comments at the Money 20/20 conference last week.
“We need to be disciplined, we need to be careful and be more cautious about how we’re deploying our investments and make sure that we’re really driving that growth in a more profitable way,” he told CNBC’s Ryan Browne at the time.
