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To support affected employees in the transitory period, the team is offering an enhanced severance package which includes bonus or commissions payments and career transition support.
ShopBack has announced plans to reduce the size of its team by 195 roles — representing 24% of the group's headcount.
In a statement on the reduction, CEO Henry Chan shared further context on the rationale for this decision. In 2021 and early 2022, ShopBack initially scaled up its team from 550 to over 900. Eventually, when market sentiments shifted from the second quarter of 2022 and aggressive growth became an unsustainable long-term strategy, the group's focus turned to cost efficiency.
Prior to the reduction, the team "explored and exhausted all viable alternatives to reduce costs", including:
- Cutting back significantly on salary increments, performance bonuses, and welfare budgets;
- Implementing pay freezes and removing performance bonuses for leaders, and for senior leaders, introducing compensation cuts;
- Removing over 100 full-time positions ShopBack was hiring for, by reducing back-fills and filling only strictly critical roles, and
- Introducing higher standards for efficiency and cost-effectiveness across the organisation.
Despite these efforts to reduce costs since 2022, sustainable growth remained a challenge.
Chan stated: "Over the past few months, we narrowed our focus, identified critical and durable problem spaces to excel in over the longer term, and established a more effective operating rhythm to keep us on track. As a company, we now have a clearer strategy in place for 2024 and beyond, and a healthy cash reserve to get us there.
"It then became clear to me that a leaner and more agile team – significantly different from our current organisational structure today – will be needed for us to succeed."
In navigating the headcount reductions, ShopBack's approach started with redesigning from scratch a revised, lean organisational structure that will enable the team to deliver on its strategy. It then reviewed all existing roles in the organisation, starting from the most senior levels, to determine the extent to which they align to future needs.
"Ultimately, I decided on a more substantial reduction to minimise the chances of us ever having to do this again."
To support affected employees in the transitory period, ShopBack is offering the following enhanced severance package:
Notice period: Affected employees will receive pay for at least two months of their notice period, in line with notice periods as per their employment contract or local statutory guidelines, whichever is longer.
Severance payment: In addition, those affected will receive one month of severance pay for every full year of their service or based on local statutory guidelines, whichever is higher.
Bonus or commissions payment: They will receive a bonus equivalent to one month pay, which will be prorated if you have yet to complete a full year of service. Business development and advertising sales team members who are on the Sales Commission Scheme instead will be paid the commission they are eligible to receive (tabulated till the end of Q1 2024).
Leave encashment: Accrued and unutilised annual leave, off-In-lieu, birthday leave, and maternity/paternity leave will be encashed (if applicable, as of last date of employment).
Learning & development: Affected employees will receive a full year's worth of Individual Development Plan (IDP) Budget to assist them in continued learning.
Healthcare: They will also receive an extended medical insurance coverage up till 30 June 2024, in markets where this is currently available and subject to terms limited by local insurance providers. They will continue having access to mental healthcare support till 30 June 2024.
ESOS vesting: The vesting schedule of employees' ESOS grant(s) will be accelerated to the next tier.
Career transition support: Per the statement, connecting team members leaving ShopBack with new job opportunities is a top priority. Depending on the location of those affected, they will be provided support in the form of either:
- CV reviews, mock interviews, and access to a professional coach, or
- a career transition support allowance, as pre-determined by their leader in consultation with HR.
Immigration support: Recognising that this news may be particularly challenging for visa holders, repatriation costs of those affected, including airfare and a budget for moving expenses, will be covered to ensure a seamless transition back home should they choose to pursue this option. ShopBack's HR teams will also be available to advise on visa and immigration matters.
Chan shared that the last in-office day for those leaving the team was Tuesday (19 March 2024), and affected individuals would have been advised on their official last date of employment in a meeting later that day.
Lead image / 123rf.com
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