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Amsterdam-listed Prosus NV and its parent Naspers are planning to cut their corporate workforce by 30%, becoming the latest global tech company to announce layoffs.
The firm, one of Europe’s largest e-commerce companies by asset value, will make cuts at its corporate centers, including hubs in Hong Kong, Amsterdam and South Africa, Chief Executive Officer Bob van Dijk said in an interview Wednesday. The job cuts are taking place over a 12 month-period and about 15 locations will be affected, he said.
“The reality is that the macro environment has become more difficult and has changed a lot,” Van Dijk said. “This also means that the cost of capital has changed a lot, as interest rates go up and risk premiums also go up.”
Van Dijk declined to say how many people would lose their jobs. Prosus employed 30 000 people globally at the end of March last year, according to an earnings report, but these roles are spread across corporate hubs and a range of businesses the e-commerce group invests in and operates, including in classified advertising, food delivery and internet payments.
Naspers shares closed 1.7% lower in Johannesburg on Wednesday, and Prosus declined 0.2% at 5:15 p.m. in Amsterdam.
Companies from Amazon.com to Alphabet’s Google have recently announced staff reductions after years of growth, as they seek to lower costs and improve profitability. The tech sector announced 97 171 job cuts in 2022, up 649% compared to the previous year, according to consulting firm Challenger, Gray & Christmas Inc.
Prosus will also seek to cut costs at the more than 80 companies it has invested in, although those efforts have different timelines and scales, according to Van Dijk. The company has already closed some offices and made cuts at others, he said. The Euronext-listed firm previously closed its iFood business in Colombia and its autos business in Peru and Ecuador.
The measures should help Prosus become profitable by the first half of 2025, according to Van Dijk.
The e-commerce firm has been working on narrowing the discount between the sum of its parts and its stake in China’s Tencent Holdings for years, with both Prosus and its Cape Town-based parent Naspers having taken a number of steps to address the problem.
These include the spinoff of its African PayTV business, the creation of Prosus through the Euronext-listing of its internet holdings, a share swap between Naspers and Prosus, and a number of share buybacks that are ongoing.
Tencent, in which Prosus is the largest investor, has already announced job cuts in recent months. Prosus also owns businesses across Europe, India, Africa and the US.
© 2023 Bloomberg
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