Due to the Economy's Significant Decline, PagSeguro Laid Off Over 500 Employees, Totaling About 7% of Its Workforce

Due to the Economy’s Significant Decline, PagSeguro Laid Off Over 500 Employees, Totaling About 7% of Its Workforce

Written by Bruno Teles

Published on 17/01/2023 at 15:04

Updated on 02/02/2023 at 19:18

Por conta da economia que teve uma grande queda, a PagSeguro demitiu mais de 500 pessoas, totalizando cerca de 7% de seus funcionários (Foto/divulgação)

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PagSeguro Laid Off About 7% Of Its Workforce, Totaling More Than 500 People. In Employees’ WhatsApp Groups And In The Company’s Corridors, It Is Said That The Total Would Be Much Higher.

All the layoffs occurred just two weeks after the announcement of Ricardo Dutra being the Chief Executive Officer, which is the highest position in the company’s hierarchy, in place of Luiz Frias, who started acting only as Chairman. Last year, in mid-October, Alexandre Magnani took Dutra’s place, now being the CEO of PagSeguro.

“Like technology companies and fintechs in Brazil and around the world, PagBank PagSeguro is also making some adjustments to its structure,” the company told Brazil Journal. In recent months, PagSeguro had already been implementing some plans for cost reduction. Even some software renewals for management, such as Slack and Miro, were canceled.

Some reports from employees who were laid off state that the announcements of these layoffs on Monday were procedural: employees were notified that they were part of the layoff and would be terminated at that moment. Soon after, the company simply disabled their access to computers and servers.

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Towards the end of last year, a significant factor hindered the company when the Central Bank set caps on some credit card interchange fees, including prepaid ones. As a result, there was a significant revenue reduction for PagSeguro of about 3%, while its earnings before all taxes fell by 15%.

According to some data collected by UBS BB, PagSeguro consolidated itself as the second-largest buyer in terms of customer numbers by mid-October, reaching 26% of the market. Unfortunately, the established growth rate was even lower than the previous year’s (1 percentage point in 2022 compared to a total of 5 percentage points in 2021). To worsen the situation, the company also lost about 5 percentage points with larger retailers, those with more than 30 employees.

The biggest growth during this period was seen by Mercado Pago, from about 4% to 10%. Cielo, which is the industry leader, began to increase and grow again after four years of a major decline: 34%, being three percentage points greater than the previous year’s record.

Due to the Economy’s Significant Decline, PagSeguro Laid Off Over 500 Employees, Totaling About 7% of Its Workforce

PagSeguro Laid Off About 7% Of Its Workforce, Totaling More Than 500 People. In Employees’ WhatsApp Groups And In The Company’s Corridors, It Is Said That The Total Would Be Much Higher.

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PagSeguro’s Stock Fell About 55% In The Last 12 Months, But There Are Also Trades At 30% Of The IPO Price. At The Time The Company Reached Its Valuation Increase In October 2021, Its Shares Plummeted By Over 85%.

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Due to the Economy’s Significant Decline, PagSeguro Laid Off Over 500 Employees, Totaling About 7% of Its Workforce

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