Dive Brief:
- Mastercard confirmed Monday that it will cut about 1,000 employees as part of a restructuring to focus on international markets announced during its second-quarter earnings report earlier this month. The company hadn’t previously disclosed that it would reduce its workforce as part of a $190 million charge related to the restructuring.
- The reduction will affect about 3% of the global card network’s full-time workforce, and the majority of notifications to employees will take place in the current quarter, so by the end of next month, the company said in a Monday statement.
- “As is our normal practice, we will provide support to everyone impacted by these actions,” the Monday statement from a spokesperson said. The spokesperson declined to specify in which parts of the world the workforce reductions would most affect workers.
Dive Insight:
Mastercard employed 33,400 employees globally as of the end of last year, with most of those workers being full-time, according to the company’s annual filing in February. About 67% of those employees were based outside the U.S., in some 80 countries, the filing said. Mastercard’s workforce cost for last year was $6 billion, including the expense of about 4,600 contractors for the year.
The contraction in Mastercard’s workforce follows the company’s discussion of the restructuring earlier this month during a second-quarter earnings report. During the call the company explained that it was tapping more technology strategies to focus on expansion in emerging markets around the world.
“We view the reorganization of Mastercard as a step in its strategy to accelerate growth, particularly in value-added services,” RBC Capital Markets analyst Daniel Perlin said in a note to that investment firms’ clients on Monday.Mastercard CEO Michael Miebach told analysts that the company plans to increase investments in new technologies, particularly in regions of the world outside of the U.S., as it seeks growth.
News of Mastercard’s workforce reduction was reported Friday by the news outlet Bloomberg, which noted the card network’s second-quarter operating expenses climbed almost 12% to $2.93 billion over the year-earlier quarter.
Mastercard reported second-quarter net income rose 15% to $3.3 billion as revenue climbed 11% to $7 billion, according to a press release on its earnings results.
“As these changes are made, we plan to redeploy resources into growth areas. Some of these include opening acceptance in new verticals and continuing to apply technology in ways that help us realize even more of the shift to digital across both consumer and commercial,” the company said previously in a statement. “We’ll also enhance and expand our Value-Added Services, such as in data analytics, fraud and cyber security, particularly as we further embed AI into our products and services.”