NZ accounting firm Xero to axe up to 800 jobs to improve profits

Xero says it will cut up to 800 jobs.
Xero says it will cut up to 800 jobs. Photo credit: Getty Images

New Zealand based software accounting firm Xero plans to shed up to 800 jobs to cut costs to improve profits.

Chief executive Sukhinder Singh Cassidy said the restructuring was needed to position the business for growth.

"To enable Xeroʼs next phase of growth and drive better customer outcomes, we need to streamline and simplify our organisation.

"These changes, and our decision to reinvest in key strategic areas, will adjust our operating cost base as we balance growth and profitability, while taking a robust approach to capital allocation that supports long term value creation."

Xero, founded and based in Wellington, but listed on the Australian Stock Exchange, offers cloud-based accounting services with more than 3.5 million subscribers and about 4500 staff with offices in New Zealand, Australia, North America, the UK and southeast Asia.

It gave no detail on where the cuts would occur.

"These headcount reductions will improve Xeroʼs operating profitability as its operating expense-to-revenue ratio is expected to reduce significantly in FY24," Singh Cassidy said.

She said the restructuring was expected to cost between $25-35 million.

The company will also sell the Australian based Waddle lending platform, bought in 2020, and write off $30-40m.

"These are difficult but necessary steps as we work to further strengthen Xero for the future, while carefully balancing the interests of all our stakeholders," Singh Cassidy said.

"We don't take these decisions lightly and we recognise today is a very hard day for our people."