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BNPL firm Sezzle to cut 20% of its jobs in North America, shares jump

Published 03/09/2022, 07:01 PM
Updated 03/09/2022, 07:05 PM
© Reuters. Sezzle logo is displayed in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration

(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:// Sezzle had 280 full time employees.

The company did not disclose a similar number in their recent 2021 annual report https:// 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.

© Reuters. Sezzle logo is displayed in this illustration taken January 25, 2022. REUTERS/Dado Ruvic/Illustration

"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)

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