Better Collective CEO confirms redundancies as part of restructure
Danish affiliate cites slow pace of operations in the US and Brazil which necessitated strategy shift has led to "difficult decision"
Better Collective CEO Jesper Søgaard has confirmed redundancies have taken place at the affiliate as part of a company restructure.
Taking to LinkedIn, the firm’s boss said there had been “emotional days” recently after the business made the decision to cut costs.
The redundancies come after Danish affiliate confirmed a company restructuring and a reduction in full-year 2024 guidance, which sent its shares plummeting.
Updated revenue for the year is expected to land between €355m and €375m (£296m and £313m) against a previous range of €395m to €425m.
EBITDA before special items for the year has also been reduced, from earlier guidance of €130m to €140m to €100m to €110m.
The guidance shift came as bosses pointed to “lower activity than expected from US partners” and a “slowdown” in Brazil.
Streamlined operations are expected to save more than €50m per year.
As part of his LinkedIn statement, Søgaard said: “Unfortunately, this plan also includes the difficult decision to part ways with some of our colleagues.
“Each of them has played a role in shaping Better Collective into what it is today, and for that I owe them all a big thank you.
“The decision was not made lightly, but prompted by lower than expected performance, in particular due to shifts in the US market as well as a continued slowdown in commercial activities in Brazil in anticipation of the upcoming regulations – markets that in recent years have been growth drivers for BC and which we still believe have strong long-term growth potentials ahead.
“Although we are now focusing on navigating difficult changes, I remain confident that we will emerge stronger as a group and are well-equipped for the long-term growth opportunities ahead.”
The announcement, which came post-market close on Thursday 24 October, meant Better Collective’s shares opened at SEK162.60 after a previous close of SEK223.50.
The slump continued throughout the day as the market was spooked by the news, with the affiliate’s stock finishing the week at SEK131.40, down 41.2% on Thursday’s close.
However, early morning trading today, 28 October, has seen Better Collective’s shares jump more than 6% to SEK140.
In turn, over the last five days, the Danish firm’s shares are down 36%.
At the time, Søgaard said the restructuring was needed to “recalibrate spending and investment strategies to ensure sustainable long-term success”.
The CEO said: “We are currently implementing adjustments that will better prepare us for the future and I am confident Better Collective will emerge even stronger following this exercise.
“We operate in a market with strong underlying growth, despite being subject to volatility, and we are well-equipped to adapt and are strategically positioned to sustain our growth in the future.”
Last week saw significant shockwaves in the affiliate sector, with Catena Media also confirming 29 redundancies.
Gentoo Media did aim to assuage investor concerns with a preliminary trading update in which it said it expects Q3 to be the 15th consecutive quarter of all-time high revenue.