(Reuters) – Sezzle Inc said on Thursday it will cut 20% of its positions in North America, and likely take about $0.5 million in one-time cash charges in fiscal year 2022, sending shares of the buy now, pay later firm up by 6.5%.
The workforce reduction at the U.S.-based company will occur across nearly all its business operations and once completed will achieve annual cost savings of about $10 million.
Sezzle, which has operations in the United States, Canada, India and Europe, had seen a 85% jump in personnel costs to $56.8 million last year due to a rise in hiring.
According to its 2020 annual report https://bit.ly/3CsS6an, Sezzle had 280 full time employees.
The company did not disclose a similar number in their recent 2021 annual report https://bit.ly/35LAv1d and did not immediately respond to a Reuters request for clarification.
Last month, its larger rival Zip Co Ltd announced plans to buy Sezzle for A$491 million ($359.02 million) and had flagged potential material cost synergies as a part of the deal.
The BNPL sector, which enjoyed a meteoric rise during the COVID-19 pandemic when online shoppers preferred alternative sources of credit, has seen market conditions soften due to the end of the pandemic spending and stimulus payments.
“Sezzle’s growth prospects remain unchanged, and these actions position the company to maximize its long term success” Chief Executive Officer Charlie Youakim said.
($1 = 1.3676 Australian dollars)
(Reporting by Indranil Sarkar in Bengaluru; Editing by Arun Koyyur and Shailesh Kuber)
