By Yadarisa Shabong
(Reuters) -British money transfer group CAB Payments will axe about 20% of its workforce to cut costs and focus on investment in artificial intelligence and automation in the face of weak trading and increased payroll taxes, it said on Thursday.
The announcement chimes with a broader trend of British companies cutting jobs, limiting hiring and increasing their reliance on technology after finance minister Rachel Reeves raised employer social security contributions and the minimum wage, leading to cost increases this year.
The company, which provides foreign exchange and cross-border payments for more than 150 countries globally, has had a bumpy ride since its 2023 London market debut, including a profit warning, a CEO change and a takeover attempt.
“We can do more with less,” CEO Neeraj Kapur, who took office last year, said in the company’s statement.
CAB Payments shares traded more than 5% lower at 0839 GMT after the company forecast annual gross income of about 105 million pounds ($128 million), below market expectations.
The company said a stronger dollar, political uncertainty and reduced humanitarian and development aid had all affected demand for cross-border payments, hitting its performance since October.
The restructuring is expected to take place during the first quarter of 2025, the company said, but a spokesman declined to say how many jobs would be affected. CAB Payments had 381 employees at the end of 2023, its latest annual report shows.
“Rebuilding confidence is likely to take time, whilst efforts to refocus strategy to drive more sustainable growth and reduce costs to improve operational leverage should be taken positively,” Shore Capital analyst Vivek Raja said in a note.
Shares in CAB Payments have fallen more than 80% from their IPO price of 335 pence apiece and lost about 17% of their value last year.
U.S. rival StoneX Group pulled out of takeover talks in November. CAB Payments said it was still waiting for its licence to operate in the United States.
($1 = 0.8194 pounds)
(Reporting by Yadarisa Shabong in BengaluruEditing by Rashmi Aich, David Goodman and Barbara Lewis)
