Global Payments may be shrinking its workforce at home, but it’s expanding by way of an acquisition too.
The Atlanta payments company in recent weeks has cut U.S. employees, though the processor has declined to say how many workers were let go. At the same time, Global Payments this week acquired a New York point-of-sale software company.
It all comes as Global Payments prepares for a presentation to investors later this month at which the company is expected to discuss a reshaped business strategy under CEO Cameron Bready, who was promoted to the role about a year ago.
As part of the new approach, it’s also expected to pursue some business unit divestitures, according to analysts who follow the company.
“We believe [Global Payments] might consider 'pruning' assets by exiting underperforming or non-core markets that lack sufficient [return on investment], including certain geographies that may have been part of larger acquisitions,” Wolfe Research analyst Darrin Peller said in an Aug. 29 note to his firm’s clients. “We also suspect the company may find select vertical market assets that make sense to divest.”
That might make for a “simpler business,” Peller said in the note, also saying that Global Payments may be “more focused near-term on completing the Issuer business cloud modernization,” with tech juggernaut Amazon.
Another analyst echoed his thoughts about potential Global Payments non-core divestitures. “At a high level, we don’t expect a major asset sale or divestiture, but rather a streamlining of the business, with a focus on getting out of subscale geographies, low growth/return portfolios, or possibly specific verticals,” RBC Capital Markets Daniel Perlin said in an Aug. 27 note to that firm’s clients.
Global Payments could be angling for a more streamlined organizational structure for its merchant services business and a more “coherent business strategy for its disparate [business-to-business] assets, Perlin said in the note.
At the same time, the company is growing. This week, Global Payments acquired New York-based IT services and consulting firm Yazara, which has as its tagline ‘Your Phone Your POS,’ highlighting its services as a point-of-sale software provider using smartphones and tablets. A spokesperson for Global Payments declined to comment on the transaction, but Yazara’s CEO was vocal about it online.
“Both companies are expecting to grow and diversify in new geographies, capturing a significant portion of an increasing SoftPOS and acquiring market opportunity,” Yazara CEO Albert Comas said in commenting on the transaction on his LinkedIn page.
Meanwhile, Global Payments cut jobs this month, according to analysts and employees. The spokesperson declined to comment on how many jobs were eliminated in the most recent round of reductions.
Those workforce cuts would be in addition to what Peller estimated were 400 Global Payment job cuts earlier this year, according to his note. “Given the number of acquisitions and automation, we suspect the company has identified a number of duplicitous roles and is right-sizing,” he said in his note.
Global Payments had about 27,000 employees in 35 countries, as of the end of last year, according to its annual filing with the Securities and Exchange Commission. About 60% of the workforce was in the Americas, with about 20% in Europe and the remainder in the Asia-Pacific region, with many in “highly skilled in technical areas specific to payment technology and software solutions,” according to the filing.
