Buy now, pay later (BNPL) firm Sezzle has announced that it will be cutting its North American workforce by 20%, according to a press release dated Thursday (March 10).
The action is intended to “continue to position the business for long-term growth while establishing a path toward profitability and free cash flow,” per the release.
Sezzle CEO and Executive Chair Charlie Youakim said this would help the company out, as it had “experienced significant growth in its history and is now at an important juncture” as they looked to take “decisive steps” toward improving the company.
He added that the company’s growth prospects had not changed and that, with the cuts, the company would have a better chance at long-term success.
Youakim claimed the cuts had not been made lightly and that the company greatly valued its team members during the process.
Once the cuts are done, Sezzle will reportedly have a way to get around $10 million in annual run-rate cost savings, like salaries and benefits. This, according to the press release, will come with a reduction across almost all business operations and will help streamline things.
In late February, PYMNTS reported that Sezzle was officially bought by fellow BNPL company Zip for $352 million. The merger aims to support the companies’ goal of being a leader around the world in the BNPL industry.
Read more: Zip to Buy BNPL Rival Sezzle in $352M Deal
According to Larry Diamond, co-founder and CEO of Zip, the idea was to bring “Zip and Sezzle together under a transformational transaction that is expected to deliver immediate scale and enhanced growth, which will support our path to profitability.”
“Combining with Sezzle positions us as a leading global BNPL provider and prioritizes our ability to win in the important U.S. market,” Diamond said at the time. According to Youakim, the merger would be fruitful for both companies.
Sezzle also recently partnered with travel payments platform Yapstone to bring installment payments to vacation rentals. As part of the collaboration, Yapstone will be able to connect its millions of consumers with Sezzle’s long-term financing product.