Australian buy now, pay later (BNPL) provider Zip is laying off 20% of its workforce, according to a recent report. The layoffs come as the company faces increasing regulation and a slowdown in growth.
Zip’s CEO for Australia and New Zealand, Cynthia Scott, said in a statement that the layoffs were necessary to “streamline our operations and cost base.” She did not confirm the number of layoffs, but a Reuters report cited local media accounts that said 20% of the company’s staff would be affected.
The layoffs are the latest in a series of setbacks for Zip. In March, the company announced that it was selling off parts of its business in a number of countries, including India, the U.K., Mexico, and the Middle East. Zip also said that it would be cutting costs and reducing its headcount.
The layoffs come at a time when the BNPL industry is facing increasing scrutiny from regulators. In Australia, the government is considering new regulations that would subject BNPL providers to the same rules as traditional lenders.
The slowdown in growth is also a factor in Zip’s decision to lay off workers. The BNPL market is maturing, and there is growing competition from traditional lenders and other BNPL providers.
The layoffs are a sign of the challenges facing the BNPL industry. However, Zip is not the only BNPL provider that has been forced to make cuts. In recent months, other BNPL providers, such as Klarna and Affirm, have also announced layoffs.
The layoffs at Zip are a reminder that the BNPL industry is still in its early stages, and that there is no guarantee of success. However, the industry also has the potential to disrupt the traditional lending market. It will be interesting to see how the industry evolves in the years to come.
