Zip Continues Streamlining BNPL Business With 20% Layoffs

Australian buy now, pay later provider Zip says it is continuing to streamline its operations.

And part of that streamlining apparently involves cutting 20% of the company’s staff, according to a Monday (July 3) Reuters report that cites local media accounts.

“Following a recent review, we have made decisions to further streamline our operations and cost base,” Cynthia Scott, Zip’s CEO for Australia and New Zealand, said in an emailed statement to Reuters. However, she did not confirm the layoffs.

PYMNTS has contacted Zip for comment but has not yet received a reply. The company’s annual report last year put its headcount at just under 1,500.

Zip was already in the midst of downsizing operations when this news broke. In March, Bloomberg News reported that the company was working to sell off parts of its business in a number of countries around the world, including India, the U.K., Mexico and the Middle East.

“It’s been a tough six to 12 months to reach that conclusion, but we are pragmatic and realistic about our position; those markets would’ve taken three to four years to achieve profitability,” CEO Larry Diamond said at the time, especially in emerging markets where buy now, pay later (BNPL) isn’t well established.

As this is happening, Zip’s home country — and the birthplace of BNPL as we know it — has been taking steps to regulate the industry.

Australia’s Assistant Treasurer and Minister for Financial Services Stephen Jones said during a speech in May that “the government will change the law, so that buy now, pay later products are regulated as credit products.”

Jones pointed to a host of issues reported to the Australian Securities and Investments Commission (ASIC) that add up to “unacceptable levels of unaffordable lending occurring, largely concentrated amongst low-income borrowers,” he said.

“BNPL looks like credit, it acts like credit, it carries the risks of credit,” he added, and pledged that a final bill would go before the Australian Parliament by year’s end.

Meanwhile, recent research by PYMNTS shows BNPL’s continued popularity among younger consumers, with 15% of millennials using this method to purchase groceries.

“This comes as shoppers overall increasingly use the payment plan to buy food at home, as the grocery sector’s share of BNPL use grew nearly 40% between January 2019 and February 2023,” PYMNTS wrote last month. “While some of this share of BNPL use for essential purchases may be due to credit card rates’ rise, more consumers needing to put food on a payment plan would likely signify a deeper economic struggle.”

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