Whispir cuts 30pc of staff, shares surge in response

The cloud communications provider says $14.3m in cost cutting will put it on track to be cashflow positive by the start of next year.

Whispir chief executive Jeromy Wells is laying of 80 staff to become cashflow positive. Picture: David Geraghty

Whispir, the ASX-listed software-as-a-service business, says will restructure its operations and make 30 per cent of its staff redundant.

Under the plan, which is intended to place Whispir on track to be cashflow positive by the start of next year, some $14.3m in costs will be cut from the bottom line.

Shares surged more than 31.3 per cent on Tuesday, closing 15c higher at 65c. The company has had a difficult year, with shares losing 70 per cent of their value.

Whispir chief executive Jeromy Wells, who had earlier set a target of profitability for the end of this financial year, said the restructure would allow the company to “establish itself as a profitable growth business”.

“The company has been through a period of significant growth which means that there are now areas that can be scaled back to pre-Covid levels for a period as the company transitions to growing sustainably and profitably without the need for additional capital,” he said.

“With this restructure we expect the company will be both EBITDA positive and cash accretive from next quarter onwards. This plan ensures we will now have the financial stability to grow profitably and self-sustainably from this coming quarter.”

Whispir provides a cloud-based communications platform which allows businesses to easily access messaging, email, social media and app alerts on one platform. It charges a subscription and is sold not only directly but also through a reseller network with partners Telstra and Optus.

The company said the restructure would cost a total of $1.8m, which represents an average of $22,500 per staff member. About 70 per cent of the roles being cut were local workers.

“With cash reserves of $17.1 million, the business will not need to raise capital to fund its ongoing operations and positions the company to maintain a strong balance sheet,” Whispir said in a statement to investors. It joins a long list of tech companies who have announce major lay-offs.

Amazon has overnight announced it would cut as many as 10,000 staff, while Meta and Salesforce have earlier said they would let go of 11,000 staff and 1000 staff, respectively.

In their latest note to clients, sent in October, brokers at Wilsons, said they expected the company to end the financial year with a cash balance of some $3m.

“Without a rebound in (annualised recurring revenue), there could be downside risk to this number,” wrote Wilsons analysts Ross Barrows, Cameron Halkett and Lachlan Woods.

“We also know that Whispir’s largest customer contributed $12.7m revenue in (the last financial year), of which we expected $9m was one-off,” they added.

In October, the company said revenues in Australia were not continuing at the level expected.