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.