Pakistan based Fintech firm Sadapay has reportedly laid off around 30% of its employees, which includes sevearl C-suite execs, according to an update shared by local sources.
Sadapay claims that the layoffs were made due to cost-cutting measures and the decision was announced during a call to its workers just a month after a strategic acquisition of the Fintech firm along with a recent equity injection.
About a month following announcing its acquisition by Turkish Fintech company Papara, SadaPay appears to have “abruptly” fired these workers.
The update was shared by the Acting Chief Executive Officer Omer Salimullah during a brief company meeting that the staff was notified about the night prior.
According to local sources, around 80 professionals at Sadapay’s technology, product development, marketing / design teams, including some workers in finance and compliance units have been fired. The move was reportedly made without any previous communications or even a prior notice / warning.
Although the exact cause of the layoffs remains uncertain, the Fintech and wider business environment is extremely challenging to navigate, particularly for startups that may not always have enough resources to cope with difficulties encountered by new initiatives.
During the past few years, Sadapay reported that it had acquired significant funding. The company introduced various user-friendly Fintech products including payment cards and other digital financial services. However, Pakistan’s socioeconomic environment is quite challenging to deal with, because of political issues and a newly formed government that is unable to effectively cope with the demands of the modern consumer and fast-evolving digital economy.
Moreover, Pakistan is constantly seeking loans from the International Monetary Fund (IMF) and Middle East countries because the nation is unable to grow its economy in a meaningful manner. Emerging Fintech startups such as Sadapay may face numerous regulatory and compliance issues as well because of the lack of clarity and abrupt nature of rule-making / enforcement in the Asian country. For comparison, it is much easier overall to launch similar businesses in the MENA region and neighboring countries such as Bangladesh and India.
