- Business payments software provider Bill said Tuesday it’s cutting 15% of its global workforce.
- The company also said it’s closing its office in Sydney, Australia. With the restructuring, Bill plans to “allocate resources to its key business priorities in service of small and midsize businesses and focus on improving the profitability of its core business,” the company said in a Tuesday filing with the Securities and Exchange Commission.
- The job cuts amount to about 378 employees, based on the San Jose, California-based company’s total headcount of 2,521 as of June 30, according to its annual filing with the SEC. “The actions announced today position BILL to deliver improved profitability without relying on interest-rate dependent float revenue,” Founder and CEO René Lacerte said in a note to employees on the restructuring.
Bill, which has offices in San Jose, Houston and Draper, Utah, provides services for small and medium-sized business payments. The company expects to incur charges of about $29 million to $35 million related to the restructuring, it said in the filing.
That expense primarily consists of cash expenditures for severance payments, employee benefits and related costs, as well as non-cash charges for stock-based compensation expenses, the company said in the filing. Most of the charges will be incurred during the quarter ending Dec. 31, “and substantially all of these charges will have been incurred by June 30, 2024,” Bill said in the filing.
Employees affected will be eligible to receive a minimum of four months’ pay and healthcare, 100% of the individual portion of their first half of fiscal year 2024 bonus, outplacement services, equity vesting through the end of February 2024 and immigration support for those on an employer-sponsored visa, Lacerte said in the note to employees.
The company noted weakness in the macroeconomic environment and businesses becoming more cost-sensitive as factors affecting its 2024 outlook when it reported fiscal first quarter results Nov. 2. Bill, which currently serves about 471,200 businesses, reported first-quarter revenue rose 33%, to $305 million, while its loss narrowed to $27.9 million in the quarter.
The job cuts could reflect about $65 million in employee savings, according to a Tuesday note from Baird Equity Research analysts. The move could also “signify maturing of the business and somewhat slower longer-term growth,” analysts wrote in the note to investor clients.
Last month, Bill sought to beat back speculation that it was set to acquire business payments company Melio for $1.95 billion. Bill isn’t in the market for “transformational” acquisitions, President and CFO John Rettig said during an investor conference presentation Nov. 17.
Bill’s also facing increased competition in the market, with former partner Intuit opting earlier this year to call off a six-year co-marketing and embedded bill-pay partnership between the companies. The tie ended in June and Bill executives expected to lose some clients as a result.
“While macro will likely remain a headwind over the near-term, we believe the increasing competitive threat of Intuit's native bill pay offering (launched in September) will likely impact growth over the medium to longer-term,” Mizuho Securities analysts wrote in a Nov. 3 note to investor clients on Bill’s quarterly results.