WiseTech new hiring slow following billionaire founder’s sensational exit

Recruitment at WiseTech is slowing, according to Citi analysis, after billionaire Richard White stepped away amid allegations he exchanged business advice for sex.

WiseTech Global founder Richard White said the company avoided ‘the big death dive’ because it didn’t pay ‘silly wages’ during the pandemic.

Staff recruitment at WiseTech is slowing, according to analysis by Citi, as its billionaire founder Richard White stepped down from the board and executive amid allegations he exchanged business advice for sex.

The logistics software giant is set to hold a virtual-only annual meeting on Friday, attracting criticism from angry shareholders its directors and executives aren’t willing to face them in the flesh and answer questions about Mr White’s departure.

Citi analyst Siraj Ahmed said WiseTech’s headcount growth has slowed to 23 per cent from 37 per cent in June year-on-year, presenting potential revenue risks.

“WiseTech’s hiring activity seems to be slow in FY25e to date, with the data suggesting that headcount has only grown by 40 in FY25e to date. We have mixed thoughts on this,” Mr Ahmed wrote in a note to investors.

“On the one hand this supports our view that EBITDA (earnings before interest, tax, depreciation and amortisation) guidance is conservative and we see upside risk, but on the other hand it could also suggest a softer revenue outlook.”

Mr Ahmed said he believed WiseTech’s revenue would be at the “lower end” of its $1.3 - $1.35bn guidance — which represents growth of 25-30 per cent.

“Headcount has increased by 40 in FY25e to date versus 171 at this time last year. Including some of the acquisitions (Envase, Blume, Softship and Pierbridge) headcount is up only 6 per cent year-on-year to 3081. Note that our headcount data is clearly understated versus 3500 FTE reported by WiseTech at FY24 which likely relates to the some of the acquired companies.

“We are towards the lower end of revenue guidance range given uncertainty regarding the 2H (second half) revenue skew especially on the contribution from new products — we see the revenue contribution as likely more longer dated that just 2H25e. We expect WiseTech to reiterate guidance at the AGM noting that industry volumes is a tailwind and FX is not a headwind currently our forecasts assume about a $20 million headwind.”

In August Mr White said WiseTech has avoided “the big death dive” which has plagued some of the world’s biggest tech players by not paying “silly” wages during the pandemic boom.

He was referring to mass lay-offs at tech companies, with Microsoft, Meta, Amazon, Alphabet, Netflix and others having sacked more than 70,000 people combined since late 2022 after embarking on recruiting binges, sparking wild share price swings.

“When wages went nuts — and tech wages were at the extremes of this, they were the real outliers in terms of inflation — we just passively went ‘OK, we are not going to participate in that. We’re not going to pay silly prices’. We are just going to be as good as we can possibly be,” Mr White said.

“And … the small number of staff that left us for much higher wages — all but one of them have come back because they all lost their jobs at the end of the cycle. So there is a real lesson here about consistency of employment versus the big sugar hit and then the big death dive.”

WiseTech Global says it also will “vigorously defend” an investor class action which claims the company engaged in “misleading and deceptive” conduct.

Law firm Phi Finney McDonald last week said it had started proceedings in the Supreme Court of Victoria, alleging the company breached its continuous disclosure obligations over its earnings guidance five years ago.

WiseTech will hold its annual meeting on Friday. The Australian Shareholders’ Association has criticised its decision told hold a virtual AGM rather than face shareholders in person.

During the pandemic, then-Treasurer Josh Frydenberg granted companies relief from the Corporations Act, allowing them to hold virtual annual meetings until March next year rather than in person — usually in hotel ballrooms or corporate offices — with the shift becoming permanent after companies adopted a hybrid approach.

ASA chief executive Rachel Waterhouse said she was disappointed WiseTech will hold the meeting virtually instead of in-person, saying “there are so many issues here”.

Originally published as WiseTech new hiring slow following billionaire founder’s sensational exit