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· Posted on
February 21, 2024

Xero focuses on more debits and less credits after it announces that profitability is its number one focus

Only 5 weeks after stepping into the role, Xero's new CEO has made some BIG moves.

What's the key learning?

  • Xero's new CEO made some big moves by making 15% of the staff redundant and announcing that Xero will exit its business lending platform.
  • When a new CEO steps into a role, they often want to make a big impact early on.
  • While shutting down Waddle and laying off 15% of staff in the first 5 weeks in the role may come as a shock, investors were clearly impressed.

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👉 Background: Xero is the New Zealand–based cloud accounting software that first listed on the ASX back in 2012. Over the last 15 years, Xero has grown to over 3.5 million subscribers and over $1.1 billion in revenue.

👉 What happened: Now, only 5 weeks after stepping into the CEO role, Xero’s new CEO has made some big moves...she has made 15% of the Xero staff redundant.

👉 What else: The CEO also announced that Xero will exit its business lending platform, Waddle, which it acquired just 3 years ago for nearly $80 million in cash and shares.

What's the key learning?

💡New CEO: new ideas and new strategic priorities. When a new CEO steps into a role, they often want to make a big impact early on.

💡By making bold and visible changes, new CEOs can help establish their leadership style and set the tone for the future of the company:

  • When Satya Nadella became CEO of Microsoft in 2014, he immediately implemented a major strategic shift towards cloud computing.
  • When Bob Iger returned as CEO of Disney, he immediately made 7,000 job cuts.

💡 While shutting down Waddle and laying off 15% of staff in the first 5 weeks in the role may come as a shock, investors were clearly impressed. Next day: Xero’s share price bounced 10%

‍

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