ShopBack, a platform for cashback and incentives, has cut 195 positions or 24% of its workforce to streamline operations and achieve financial independence.

The shocking news was delivered during a town hall meeting by business CEO and co-founder Henry Chan on Tuesday, Mar. 19. The company also canceled the remainder of the workday.

"Out of respect and to ease transition for departing team members, we have decided to keep all departures to the same day. Consequently, the last in-office day for those leaving the team will be today, Tuesday, March 19th 2024 ... To allow for proper farewells, Slack communication channels will remain accessible to all departing ShopBackers on their mobile devices until the end of today," as per the note on its website.

What Happens Next

According to The Straits Times, laid-off workers were provided severance compensation consisting of two months' worth of salary for each month of notice plus an extra month for every complete year of service or according to local legislative criteria, whichever is bigger.

In addition to paid time off, they will also get a bonus equal to one month's income (prorated for employees who did not work a full year), and they may cash in their unused vacation days.

All departing workers will receive Extended health insurance coverage, and mental health support services will be available until June 30. As part of their career transition assistance, these workers will have the option of having their resumes reviewed or receiving a "career transition support allowance" that is decided in conjunction with human resources.

Meanwhile, visa holders would be paid for the costs of repatriation, including travel and a budget for relocation expenses.

Also Read: Unilever to Layoff 7,500 Employees and Split off Ice Cream Division to Slash Costs, Boost Profits

Most Difficult Decision

According to Chan, this is among the most difficult choices he has ever made for the company. He admitted that the company's fast expansion and his own pursuit of too many goals were mistakes. "I take full responsibility for the decisions that have led to this situation," he stated.

In his statement, the CEO said that ShopBack's goal for sustainable development was to reorganize and streamline the company's organizational structure to implement the layoffs.

According to him, an assessment of all current positions in the company began at the highest levels to ascertain how well they fit with ShopBack's future requirements.

"Ultimately, I decided on a more substantial reduction to minimise the chances of us ever having to do this again," Chan stated.

Also Read: Joann Fabrics Files for Chapter 11 Bankruptcy, Pledges to Keep Stores Open Amid Financial Turmoil