By Millie Muroi
Australia’s largest online book retailer Booktopia has cut up to 40 staff in its latest round of cost-saving measures, as it aims to shake off its recent history of leadership plot twists and financial losses.
The company said in an announcement on Monday, that it had implemented a number of cost-cutting measures as a response to changing consumer sentiment, greater online competition and inflation.
Former Booktopia CEO Tony Nash in happier times.Credit: Steven Siewert
That includes an organisational restructure involving “30 to 40 redundancies,” or about 10 to 15 per cent of its employees, which the bookseller expects will save between $4 million and $5 million in annualised costs.
Booktopia chairman Peter George said the measure was part of a vision to position the company for challenging online retail conditions in the near term. “Letting some of our talented staff go as part of these cost-cutting initiatives is a disappointing but necessary step in these economic times,” he said.
A spokesperson for the company said the redundancies were largely in administrative roles rather than warehouse positions.
Shares in the company were up 32 per cent on the announcement, closing at 27.5 cents. Booktopia shares have shed hundreds of millions of dollars in value since listing on the ASX in December 2020 at $2.30.
An investigation by The Age and Sydney Morning Herald revealed that the group fell out of favour with investors during its first 18 months on the ASX amid concerns about its leadership.
Struggling to meet its earnings forecasts after a period of strong pandemic-inspired growth, the bookseller quietly began laying off staff last year.
Nash effectively returned to the helm of the company last September as executive director, after calling for a shareholder meeting in August, with a plan to use his family and friends’ 30-per-cent-plus stake to overhaul the board.
The company’s four remaining directors resigned, leaving Booktopia searching for replacements. In December, Peter George, well known for his execution of corporate turnarounds, was appointed chairman and non-executive director. George has been involved in several prominent turnarounds including those for Nylex and, more recently, Retail Food Group.
Other cost-cutting initiatives announced on Monday included an increase in postage and handling costs for consumers, price adjustments on various products to reflect increasing costs and a reduction in the company’s lease obligations.
The initiatives are expected to deliver $12 to $15 million of improvements to the company’s earnings in FY24 and beyond.
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