CAB Payments will cut 20% of its workforce as fintech puts its trust in AI
- CAB Payments is expected to lay off 80 employees, mainly in Great Britain
- The company plans to implement this restructuring in the first quarter
CAB Payments has unveiled plans to reduce its workforce by a fifth and invest in artificial intelligence to keep costs down.
The fintech group’s stock has lost about 80 percent of its value since listing on the London Stock Exchange in July 2023, amid profit warnings and the departure of its CEO.
CAB told shareholders on Thursday that it expects savings from job losses to offset last year’s “annualization of strategic hiring” as well as inflation and national insurance rates.
From April, employers will pay NI contributions of 15 per cent on staff salaries above £5,000, up from the current rate of 13.8 per cent on wages above £9,100.
Many British companies have responded to the tax increase by taking pre-emptive measures to reduce workforces or scale back hiring plans.
It is believed CAB will make 80 staff redundant, most of them affected in Britain, while also investing in automation and artificial intelligence.
The Southwark-based company plans to implement this restructuring in the first quarter of 2025.
Layoffs: CAB’s CEO, Neeraj Kapur (pictured), said the company will see ‘a number of colleagues who have been part of our journey leave our group’
Neeraj Kapur, CEO of CAB, said: “As part of the increased focus on performance, we are taking significant steps to realign the cost base with our strategic growth plans; meaning we can do more with less.
“As a result, we will see a number of colleagues who have been part of our journey leave our group.”
CAB, the holding company of Crown Agents Bank, specializes in the provision of payment and currency services.
Total trading volumes rose by £3.4 billion to £37.6 billion last year, with all growth driven by developed markets.
However, the London-listed company saw demand for cross-border payments affected by a stronger dollar, lower aid flows and political uncertainty.
Its take rate – the percentage it receives as commission from a transaction – almost halved from 0.26 percent to 0.14 percent due to lower demand for US dollars in certain markets and declining market volatility in emerging currencies.
As a result, the group expects to report gross income of around £105m for 2024, up from £137m the year before.
Kapur added: “CAB’s fundamental business model remains robust, based on strong connectivity to emerging markets; our market share is growing and we are seen as experts in what we do.
“We are now focused on driving volume growth, but more importantly on take rates and operating leverage, and that is where our banking business becomes a key driver.”
US payments company Stone
StoneX reportedly made multiple bids, including one valuing CAB at £368.5 million, before walking away in November.
CAB Payments Holdings shares fell 2 percent to 65.25p, taking their losses over the past six months to around 43 percent.
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