Aussie company sacks – Michmutters

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Australian IT company Megaport sacks 10 per cent of staff, pays them $1.6m

Australian IT company Megaport sacks 10 per cent of staff, pays them $1.6m

An Australian tech company sacked around 10 per cent of its staff despite announcing its revenue had jumped by 40 per cent to $109.7 million in the past financial year.

The Brisbane-based telecommunications and IT infrastructure company called Megaport revealed that a whopping $1.6 million was spent paying out employees who had been made redundant.

Around 35 staff members – out of its 345 estimated workforce on LinkedIn – were impacted by the cuts.

“On July 14 2022, management made the decision to reduce its workforce in order to reduce costs and prepare for rising prices and inflation across the group’s key markets,” Megaport revealed in its report to investors.

Its revenue had grown from $78.3 million from the previous financial year, its results showed, while its monthly recurring revenue soared by 43 per cent to $10.7 million in June, mainly as a result of new customers from the US.

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The 10-year-old company, which was founded by multi-millionaire Bevan Slattery, is one of the many Aussie tech outfits that have suffered from a battering on the share market this year.

Its shares have plummeted by 53 per cent since the start of the year, but its results reported on Tuesday helped its stock rise by 9 per cent defying the broader trend of investors selling off loss making tech shares.

Megaport reported a full year net loss of $48.5 million down from $55 million the year earlier, while it increased customers from 2,285 to 2,643.

It currently has $82.5 million in cash, according to its report.

tech bloodbath

Aussie employees from the tech sector have suffered a brutal round of cuts in recent times, with Megaport’s staff the latest casualties.

An Australian social media start-up called Linktree that was recently valued at $1.78 billion is sacking 17 per cent of staff from its global operations, it revealed this week.

Immutable, an Australian crypto company valued at $3.5 billion was facing a fierce backlash last week after sacking 17 per cent of its staff from its gaming division, while continuing to “hire aggressively” after raising $280 million in funding in March.

Australian healthcare start-up Eucalptys that provides treatments for obesity, acne and erectile dysfunction fired up to 20 per cent of staff after an investment firm pulled its funding at the last minute.

Debt collection start-up Indebted sacked 40 of its employees just before the end of the financial year, despite its valuation soaring to more than $200 million, with most of the redundancies made across sales and marketing.

Then there was Australian buy now, pay later provider Brighte, that offers money for home improvements and solar power, which let go of 15 per cent of its staff in June, with roles primarily based on corporate and new product development.

Another buy now, pay later provider with offices in Sydney called BizPay made 30 per cent of its redundant workforce blaming market conditions for the huge cut to staffing in May.

Earlier this year, a start-up focused on the solar sector called 5B Solar, which boasts backing from former prime minister Malcolm Turnbull, also sacked 25 per cent of its staff after completing a capital raise that would inject $30 million into the business

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Australian social media company Linktree sacks 17 per cent of staff

Australian social media company Linktree sacks 17 per cent of staff

An Australian social media start-up that was recently valued at $1.78 billion is sacking 17 per cent of staff from its global operations.

The company, whose main offices in Australia are based in Sydney and Melbourne, said it has 25 million users and is one of the top 300 most popular websites globally with 1.2 billion monthly views.

Yet, his co-founder and chief executive Alex Zaccaria, revealed on LinkedIn that he was “heartbroken” to announce that staff would be axed.

The news came despite the company, which has been backed by billionaire Afterpay co-founder Nick Molnar, raising $US110 million ($A1578 million) in March.

It also announced a brand transformation in June and revealed plans for a whole suite of new tools and features set to be released over the coming months.

The company is believed to have around 300 employees, with the 17 per cent figure equating to around 50 staff that will be sacked, with roles impacted understood to cover talent acquisition, people and culture, design and marketing.

Mr Zaccaria said he had shared the “difficult news” with staff about the cuts, which were being made to “emerge stronger from the economic downturn”.

“Our people have built Linktree into what it is today: trusted by millions of people around the world. I’m heartbroken to say goodbye to some incredible teammates today, and want to do all I can to support them,” he said.

“On Friday, we will post a public, opt-in Airtable for those of our team impacted and ask you to please consider this group of incredibly talented and passionate people for roles you have open. I can assure you they will make huge contributions wherever they land.

“If you’d like to speak to me personally about any individual, my DM’s are open.”

The cuts come after the company introduced a $6000 reward annually to staff just six months ago, with the perk described as “mind-blowing” by employees at the time.

Linktree started off as a way for influencers to link to everything from their outfits, blog posts, podcast episodes and social media, but has evolved into a platform that enables brands, artists and businesses to monetize their content through social media.

Its high-profile users feature Selena Gomez and Dwayne ‘The Rock’ Johnson as well as brands such as TikTok and Red Bull.

Mr Zaccaria also revealed that the company had made some “big bets” and hired in line with its ambitions, but economic conditions had changed in 2022 forcing the company to make the cuts.

“Conditions changed faster than expected and those assumptions I made were wrong,” he said. “I have many learnings to take into the next phase of building Linktree. That next phase involves narrowing our focus on our long-term strategy by reducing roles that are no longer aligned with our road map.”

In a further letter to Linktree staff, Mr Zaccaria said he would be hosting a weekly ‘Ask Me Anything’ session to staff for the next four weeks.

“Friday will be a company-wide mental health day at Linktree. For a company like ours, so focused on culture and camaraderie, this will be difficult news,” he said.

“I don’t expect anyone to be their normal selves. We will also be allocating you an additional mental health day that you can take at a time that suits you.

“The opportunity for Linktree is immense and I have no doubt we’ll achieve everything we intend to and more for our creators.

“The right path is rarely the easy path. Today’s change to our team is the hard way, but it puts us in a strong position to deliver on the opportunity we have in front of us.”

Staff that have been made redundant will receive an average of 11 weeks pay, mental health support for three months and laptops and work from home equipment will be gifted.

The company is still actively recruiting for roles on LinkedIn including product managers, integrated marketing managers and engineers, with 16 jobs currently advertised.

Tech sector bloodbath

Linktree’s staff are the latest casualties in the tech sector, which has seen a spate of companies firing staff as conditions get tougher.

Immutable, an Australian crypto company valued at $3.5 billion was facing a fierce backlash last week after sacking 17 per cent of its staff from its gaming division, while continuing to “hire aggressively” after raising $280 million in funding in March.

Australian healthcare start-up Eucalptys that provides treatments for obesity, acne and erectile dysfunction fired up to 20 per cent of staff after an investment firm pulled its funding at the last minute.

Debt collection start-up Indebted sacked 40 of its employees just before the end of the financial year, despite its valuation soaring to more than $200 million, with most of the redundancies made across sales and marketing.

Then there was Australian buy now, pay later provider Brighte, that offers money for home improvements and solar power, which let go of 15 per cent of its staff in June, with roles primarily based on corporate and new product development.

Another buy now, pay later provider with offices in Sydney called BizPay made 30 per cent of its redundant workforce blaming market conditions for the huge cut to staffing in May.

Earlier this year, a start-up focused on the solar sector called 5B Solar, which boasts backing from former prime minister Malcolm Turnbull, also sacked 25 per cent of its staff after completing a capital raise that would inject $30 million into the business

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Business

Australian tech company Appen’s future uncertain as shares plunge by 27 per cent

Australian tech company Appen's future uncertain as shares plunge by 27 per cent

Shares for an Australian tech company have plunged after their earnings were 69 per cent lower than expected.

On Tuesday, Sydney-based artificial intelligence firm Appen posted its results for the first half of 2022, but that had a detrimental impact on its share price.

The company, which provides important data to tech giants around the world including Facebook, Google and Amazon, has been struggling in recent months.

According to The Australian, when its earnings were taken into account before interest, taxation, depreciation and amortization, it had made 69 per cent less than the same period the year before.

Appen generated $8.5 million in net profit over the last six months compared to $12.5 million in the same like period in 2021.

To top that off, the Aussie firm also posted a net loss of $3.8 million.

In total, it suffered a revenue drop of seven per cent to $182.9 million.

As a result, Appen’s share price dropped 27.3 per cent to $4.15 on Tuesday. At time of writing on Wednesday morning, it had recovered slightly, up by two per cent to come in at $4.24.

Appen’s CEO Mark Brayan blamed the poor performance on global market conditions as well as a weaker appetite for digital advertising.

During the earnings call, Mr Brayan said, per the Sydney Morning Herald: “With no improvement in July trading, there remains uncertainty about a continued slowdown of spending from our global customers and their exposure to weaker digital advertising demand.

“As a result, the conversion of forward orders to sales is less certain this year compared to prior years.”

Mr Brayan added in a statement to the ASX that conditions were “challenging” and that they were seeing a “flow-on effect” as customers spent less on advertising.

With lessening demand for their services, Appen also revealed that costs had blown out as the day to day running of the business became more expensive.

It cited investment in product and technology, heightened employee expenses, recruitment, and IT costs as another avenue where money was lost.

Like many other tech companies around the world, Appen has taken a dive, as its share price has fallen 62 per cent this year following massive gains at the height of the pandemic.

At their peak, Appen’s shares were worth around $43.50, back in August 2020. It is now trading at $4.24.

Appen first started on a downward trend in June, after its rival, Canadian IT firm Telus, scuppered a takeover deal.

The Canadian business had proposed a $9.50-per-share takeover bid for Appen, which would have made the Australian company worth $1.2 billion.

It’s unknown why Telus canned the deal.

News.com.au has contacted Appen for comment.

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