Payoneer Global Inc (NASDAQ:PAYO) yesterday announced a plan to reduce its workforce by approximately 9% of the company’s current total headcount. The fintech company expects that the implementation of its restructuring plan will be substantially completed by the end of the third quarter of 2023.
“The Plan is expected to enhance productivity and efficiency and streamline the Company’s organizational structure to better align operations with its growth objectives. The Company intends to reinvest some savings from the Plan into future growth initiatives, and to continue hiring for roles essential to those initiatives in areas such as research and development,” Payoneer said in a filing.
Payoneer forecasts that it will incur charges of approximately $5 million in the third quarter of 2023.
Goldman Sachs analysts said that the plan is “another step in PAYO's refocused company strategy and in line with commentary from 1Q23 earnings which set up expectations to exit 2023 with lower headcount versus the prior year.”
“The headcount reduction comes as an additional piece in PAYO's incremental focus on profitable growth, which includes recent investments in onboarding and compliance to improve the efficiency of the organization and unit economics,” they said in a client note.
“Given the current depressed valuation (~8x 2024 EBITDA), as well as concerns by investors over the lack of profitability ex-float revenues, we expect this announcement to be well-received particularly in light of the fact that PAYO's press release noted a positive expected impact on its EBITDA guidance and (in our view) further positive revisions to 2024 expectations.”
PAYO shares are up 3.5% in premarket Tuesday.