Xero’s announcement it would shed 15 per cent of its staff, exit the struggle Waddle platform, and cut further costs has been rewarded with a leap in value.
Shares jumped as much as 15 per cent yesterday, before normalising. The stock has risen more than 12 per cent this week alone, sitting at $86.84 a share as of 11.15am, Friday.
New CEO Sukhinder Singh Cassidy has only been in the top role for five weeks; clearly shareholders have confidence in this strong start.
The cost cutting has been implemented to “streamline its operations, realign the business to drive greater operating leverage and better balance growth and profitability”, according to a filing with the ASX.
Between 700 and 800 staffers will be made redundant.
Xero will also exit SMB lending platform Waddle, which will result in a $30-$40 writedown in the company’s full-year financials – which is due in May.
The financials will also no doubt include more detail on Singh Cassidy’s cost-cutting plan.
