CAB Payments’ automation focus to hit 20% of jobs

British money transfer group CAB Payments will axe about 20% of its workforce to cut costs and focus on investment in artificial intelligence and automation in the face of weak trading and increased payroll taxes, it said on Thursday.

The announcement chimes with a broader trend of British companies cutting jobs, limiting hiring and increasing their reliance on technology after finance minister Rachel Reeves raised employer social security contributions and the minimum wage, leading to cost increases this year.

The company, which provides foreign exchange and cross-border payments for more than 150 countries globally, has had a bumpy ride since its 2023 London market debut, including a profit warning, a CEO change and a takeover attempt.

“We can do more with less,” CEO Neeraj Kapur, who took office last year, said in a statement.

CAB Payments shares were more than 5% lower in morning trading after the company forecast annual gross income of about £105m below market expectations.

The company said a stronger dollar, political uncertainty and reduced humanitarian and development aid had all affected demand for cross-border payments, hitting its performance since October.

The restructuring is expected to take place during the first quarter of 2025, the company said, but a spokesperson declined to say how many jobs would be affected. CAB Payments had 381 employees at the end of 2023, its latest annual report shows.

“Rebuilding confidence is likely to take time, while efforts to refocus strategy to drive more sustainable growth and reduce costs to improve operational leverage should be taken positively,” Shore Capital analyst Vivek Raja said in a note.

Shares in CAB Payments have fallen more than 80% from their initial public offering price of 335p apiece and lost about 17% of their value last year.

US rival StoneX Group pulled out of takeover talks in November. CAB Payments said it was still waiting for its licence to operate in the US.

Reuters