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May 13, 2020

Card processor StoneCo retrenches 20% of workforce

Brazilian card processor StoneCo has decided to slash 20% of its workforce that will see 1,300 of its employees being laid off, Reuters reported.

The move comes after the Covid-19 pandemic affected the retail credit and debit card sales of the company and its competitors like Cielo and PagSeguro Digital.

The downsizing exercise led to a 12% decline in StoneCo’s share price on the Nasdaq, the report added.

The Warren Buffett-backed firm made its debut on the Nasdaq in October 2018, with shares priced at $24, around the same level as its latest closing price.

In a letter to its employees, StoneCo CEO Thiago Piau said: “This year will be very different from what we were anticipating in late 2019.

“As a nation, we will face difficult times that will affect every Brazilian and business of all sizes.”

The company, however, witnessed a recovery in the card transaction volumes between April and early May, Piau said.

Piau added: “We have been very diligent in managing costs and expenses, as well as capital expenditures in order to support our profitability.”

Currently, 90% of StoneCo’s employees are working from home, including the sales staff.

The firm’s workforce increased by 66% last year. Personnel makes up for 40% of its total expenses.

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