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To support impacted employees during the transition, the team is offering enhanced severance packages that include bonuses or commissions and career transition support.
ShopBack has announced plans to reduce the size of its team by 195 positions, accounting for 24% of the group’s headcount.
In a statement about the cuts, CEO Henry Chan further shared the rationale for the decision. In 2021 and early 2022, ShopBack initially expanded its team size from 550 to more than 900 people. Ultimately, the group’s focus shifted to cost efficiency when market sentiment shifted from Q2 2022 and aggressive growth became an unsustainable long-term strategy.
Before making the cuts, the team “explored and exhausted all feasible alternatives to reduce costs,” including:
- slashing budgets for salary increases, performance bonuses and benefits;
- Implementing a salary freeze for leaders and eliminating performance bonuses, and implementing salary cuts for senior leaders;
- Eliminating the more than 100 full-time positions ShopBack is recruiting for by reducing fill vacancies and filling only strictly critical positions, and
- Introducing higher efficiency and cost-effectiveness standards across the organization.
Despite these efforts to reduce costs since 2022, sustainable growth remains a challenge.
“Over the past several months, we have narrowed our focus, identified critical and persistent problem spaces that need to be addressed over the long term, and established a more efficient operating rhythm to keep us on track as a company,” Chen said. , we now have a clearer strategy for 2024 and beyond and have sufficient cash reserves to help us achieve this goal.
“Then it became clear to me that we needed a leaner, more agile team — very different from our current organizational structure — to be successful.”
During the layoff process, ShopBack’s approach was to redesign from the ground up with a revised, lean organizational structure that would enable the team to deliver on its strategy. It then reviews all existing roles in the organization, starting at the top, to determine how well they align with future needs.
“Ultimately, I decided to make deeper cuts to minimize the chance of us doing this again.”
To support affected employees during the transition, ShopBack is offering the following enhanced severance packages:
notice period: Affected employees will be paid at least two months’ notice period pay in accordance with the notice period specified in their employment contracts or local statutory guidelines (whichever is longer).
Severance pay: In addition, affected personnel will receive one month of severance pay for each year of service, or in accordance with local legal guidelines, whichever is higher.
Bonus or commission payment: They will receive a bonus equal to one month’s salary, which will be prorated if you have not completed a full year of service. Business Development and Advertising Sales team members who participate in the Sales Commission Program will receive the commissions for which they are eligible (table as of the end of the first quarter of 2024).
Leave encashment: Accrued and unused annual leave, compensatory time off, birthday leave and maternity/paternity leave will be encashed (if applicable, as of last date of employment).
Learning and development: Affected employees will receive a full-year Individual Development Plan (IDP) budget to help them continue their learning.
health care: They will also receive extended medical coverage until June 30, 2024, in markets where this service is currently available, subject to terms restricted by local insurance companies. They will continue to receive mental health support until June 30, 2024.
Those belonging to: The vesting timetable for employee ESOS grants will be accelerated to the next level.
Career Transition Support: According to the statement, providing new job opportunities to team members leaving ShopBack is a top priority. Depending on where those affected are located, they will receive support in the following forms:
- Resume reviews, mock interviews and access to professional coaching, or
- Career transition support allowance is determined in advance by the leader in consultation with the Human Resources Department.
Immigration support: Recognizing that this news may be particularly challenging for visa holders, affected individuals’ repatriation costs, including flights and moving cost budgets, will be covered to ensure a smooth transition back home if they choose this option. ShopBack’s HR team will also provide advice on visa and immigration matters.
Chan said the last day of work for those leaving the team will be Tuesday (March 19, 2024) and affected individuals will be informed of their official final date of employment at a meeting later that day.
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