Fintech

Sezzle cuts staff as it merges with Zip

The smaller "buy now, pay later" company is cutting up to 50% of worldwide staff as it prepares to be acquired by Zip.

Sezzle logo on fire

The announced layoffs, which are across all business operations, will provide $10 million in annual cost savings, Sezzle said.

Image: Sezzle, Protocol

"Buy now, pay later" company Sezzle has laid off a substantial portion of its staff as it merges with larger company Australia-based Zip.

Minneapolis-based Sezzle said it is laying off 20% of its North American staff, but worldwide Sezzle is cutting about 40% to 50% of its employees, including substantial cuts in Europe, according to a person familiar with the staff reductions. Sezzle declined to comment on global layoffs.

On Feb. 27, Minneapolis-based Sezzle agreed to be acquired by Australia-based Zip for $353 million. The deal is expected to close by the end of the third quarter.

Zip declined to comment, referring inquiries to Sezzle.

The announced layoffs, which are across all business operations, will provide $10 million in annual cost savings, Sezzle said.

The Sezzle-Zip deal is the latest consolidation in the hot "buy now, pay later" sector: Zip had previously bought Quadpay, and Block recently closed its acquisition of Afterpay. (The all-stock deal, initially worth $29 billion, ended up being worth less than $15 billion because of the decline in Block’s share price.)

The acquisitions show that global scale in this sector matters, particularly as these companies become full-fledged consumer credit companies that need to cut large deals with merchants and other financial institutions to compete. Besides "buy now, pay later"-focused Affirm, Klarna and Block’s Afterpay, others such as PayPal have a large presence in "buy now, pay later,” and credit card networks American Express, Visa and Mastercard also have offerings.

Zip and Sezzle previously touted the enhanced “U.S. footprint” of the acquisition with a combined 8.8 million U.S. customers and 60,500 U.S. merchants through the deal, and a combined 13.3 million global customers and 128,800 global merchants.

The Sezzle layoffs were being made to cut the company’s burn rate while the acquisition was taking place and in order for the deal to be completed, the person familiar with the cuts said.

In a release Thursday Sezzle said the cuts were being made “to continue to position the business for long-term growth with establishing a path toward profitability and free cash flow.”

Zip, which reported a loss of $79.6 million in the second half of 2021, previously has said that the Sezzle deal would provide cost savings that would enable the company to become profitable in 2024, citing potential “reduction in combined employee expenses and duplicative roles.”

Some Sezzle employees were notified of the layoffs Wednesday morning, according to the person.

Sezzle has employees in North America, India and Europe. The company listed its shares on the Australian Stock Exchange in 2019, citing the familiarity of investors in that country with the “buy now, pay later” business model, and was seeking a U.S. listing.

Zip has set up “buy now, pay later” with large merchants such as Amazon, Walmart and others. Sezzle’s strengths are small and mid-sized merchants, though it also signed a three-year deal with Target last year.

Enterprise

Microsoft Exchange Online users face a key security deadline Saturday

The company will start disabling a highly vulnerable login option, known as "basic authentication," beginning on Oct. 1 — though customers will have one chance to buy more time to transition off the system.

Microsoft has been seeking to prod businesses to move off basic authentication for the past three years, but "unfortunately usage isn’t yet at zero," it said in a post earlier this month.

Illustration: Christopher T. Fong/Protocol

Microsoft is about to eliminate a method for logging into its Exchange Online email service that is widely considered vulnerable and outdated, but that some businesses still rely upon.

The company has said that as of Oct. 1, it will begin to disable what's known as "basic authentication" for customers that continue to use the system.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at kalspach@protocol.com.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Fintech

Gavin Newsom shows crypto some California love

“A more flexible approach is needed,” Gov. Newsom said in rejecting a bill that would require crypto companies to get a state license.

Strong bipartisan support wasn’t enough to convince Newsom that requiring crypto companies to register with the state’s Department of Financial Protection and Innovation is the smart path for California.

Photo: Jerod Harris/Getty Images for Vox Media

The Digital Financial Assets Law seemed like a legislative slam dunk in California for critics of the crypto industry.

But strong bipartisan support — it passed 71-0 in the state assembly and 31-6 in the Senate — wasn’t enough to convince Gov. Gavin Newsom that requiring crypto companies to register with the state’s Department of Financial Protection and Innovation is the smart path for California.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Workplace

Slack’s rallying cry at Dreamforce: No more meetings

It’s not all cartoon bears and therapy pigs — work conferences are a good place to talk about the future of work.

“We want people to be able to work in whatever way works for them with flexible schedules, in meetings and out of meetings,” Slack chief product officer Tamar Yehoshua told Protocol at Dreamforce 2022.

Photo: Marlena Sloss/Bloomberg via Getty Images

Dreamforce is primarily Salesforce’s show. But Slack wasn’t to be left out, especially as the primary connector between Salesforce and the mainstream working world.

The average knowledge worker spends more time using a communication tool like Slack than a CRM like Salesforce, positioning it as the best Salesforce product to concern itself with the future of work. In between meeting a therapy pig and meditating by the Dreamforce waterfall, Protocol sat down with several Slack execs and conference-goers to chat about the shifting future.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

LA is a growing tech hub. But not everyone may fit.

LA has a housing crisis similar to Silicon Valley’s. And single-family-zoning laws are mostly to blame.

As the number of tech companies in the region grows, so does the number of tech workers, whose high salaries put them at an advantage in both LA's renting and buying markets.

Photo: Nat Rubio-Licht/Protocol

LA’s tech scene is on the rise. The number of unicorn companies in Los Angeles is growing, and the city has become the third-largest startup ecosystem nationally behind the Bay Area and New York with more than 4,000 VC-backed startups in industries ranging from aerospace to creators. As the number of tech companies in the region grows, so does the number of tech workers. The city is quickly becoming more and more like Silicon Valley — a new startup and a dozen tech workers on every corner and companies like Google, Netflix, and Twitter setting up offices there.

But with growth comes growing pains. Los Angeles, especially the burgeoning Silicon Beach area — which includes Santa Monica, Venice, and Marina del Rey — shares something in common with its namesake Silicon Valley: a severe lack of housing.

Keep Reading Show less
Nat Rubio-Licht

Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Latest Stories
Bulletins