Trade Window makes trade logistics software. Photo / Michael Craig
Trade Window makes trade logistics software. Photo / Michael Craig
Another total tech firm is laying off staff.
NZX-listed Trade Window says it will cut up to 35 roles - or one-third of staff - in a cost-cutting drive.
The maker of trade logistics software, incorporating blockchain technology, also flagged a pending revision of its FY2024 and FY2025 guidance, whichit said would be provided after its consultation process wraps up “approximately the end of March” (its FY2023 year closes on March 30).
“The potential changes predominantly relate to R&D roles and do not impact TradeWindow’s ability to continue to serve all its current and future customers, meet market demand and generate revenue from existing solutions,” the firm said in an NZX filing. Talks continued on potential additional funding.
The move follows a discounted rights issue, in which the maker of export logistics software attempted to raise $20 million. Trade Window said on March 1 it closed its issue, following an extension, after securing just $5.4m.
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Forsyth Barr - which ended coverage on March 2 - said in a February 28 research note that it estimated Trade Window would finish its financial year on March 30 with around $7m in cash. “We estimate TradeWindow’s prior cash burn was around $1m per month,” Forsyth Barr analysts James Lindsay and Will Twiss said.
Trade Window founder and chief executive AJ Smith told the Herald on March 2 that cash burn had already been reduced below $1m per month by a double-digit percentage, in part through outsourcing a number of roles to the Philippines.
On March 2, Smith told the Herald that negotiations with potential strategic investors for extra funds will take “two to three weeks at max to conclude”.
Today, Trade Window said in an NZX filing that “TradeWindow remains in discussions with potential strategic investors and is also exploring alternative funding sources.”
Smith, who had total remuneration of $391,876 in FY2022, according to TradeWindow’s annual report, said on March 1 that in the event of cost-cutting, “I would of course share the pain, lead by example and take a pay cut.”
Smith could not be immediately reached for comment, but a TradeWindow spokesperson said, “The consultation process is under way so it wouldn’t be appropriate to provide specifics on any particular employees or any terms and conditions while that is occurring.”
Trade Window founder and CEO AJ Smith. Photo / Supplied
Smith earlier refused to say if cornerstone investor ASB Bank had participated in the rights issue. In a statement, ASB said, “As TradeWindow is a listed company any comment ASB has to make about its relationship with TradeWindow will, appropriately, be made via the NZX.” None of TradeWindow’s market releases around its rights issue and potential additional fundraising reference ASB.
On November 17, TradeWindow reported a first-half loss that widened 18 per cent to $7.1m on revenue that rose 16 per cent to $2.4m for the six months to September 30, 2022. Its current guidance has the firm breaking even by the end of FY2025.
TradeWindow listed on November 22, 2021 with a reference price of 92c, and saw its shares debut at $1.15 -a 25 per cent premium for a market cap of $99 million - and hit a high of $2.69 in January last year.
Shares closed Tuesday at 33c.
“Market demand for TradeWindow’s solutions remains high. We are confident in the future of TradeWindow and continue to invest in a targeted and focused way,” Smith said in his firm’s NZX filing this morning.
TradeWindow’s pending layoffs follow an announcement by Wellington-based, ASX-listed Xero that it will cut up to 800 staff (or 15 per cent of its workforce), with more cuts possible following a structural review, and news that Sky TV will axe up to 170 local roles as it outsources technology, content and operations roles to India and the Philippines, and a review at Xero’s regional rival MYOB that staff say will hit more than 80 roles (the firm would not confirm a figure).
Meanwhile, the parade of multinational tech layoffs continued this morning with Facebook parent Meta confirming plans to layoff about 10,000 employees, or about 13 per cent of its workforce.
It follows a cull of 11,000 staff, announced in November, which at the time also equated to around 13 per cent of staff.
