Key Points:
- Mastercard is reducing its global workforce by 3%, affecting about 1,000 employees
- The layoffs are part of a reorganization announced earlier this year to focus on core businesses
- Most affected employees will be notified by the end of the third quarter
- Mastercard plans to redeploy resources into growth areas like new markets and cybersecurity
- The company will record a one-time restructuring charge of $190 million in Q3
- This restructuring aligns with Mastercard’s new organizational structure focused on Core Payments, Commercial & New Payment Flows, and Services
Mastercard, the global payments giant, has announced plans to reduce its workforce by 3%, affecting approximately 1,000 employees worldwide. This move comes as part of a broader reorganization strategy unveiled earlier this year, aimed at sharpening the company’s focus on its core businesses and driving long-term growth.
The Purchase, New York-based company, which employed 33,400 people at the end of 2023, expects to notify most of the affected employees by the end of the third quarter. This reduction in headcount aligns with Mastercard’s efforts to streamline operations and reallocate resources to high-growth areas.
“As these changes are made, we plan to redeploy resources into growth areas,”
a Mastercard spokesperson stated. The company intends to reinvest in expanding into new markets and bolstering its cybersecurity and anti-fraud capabilities, which are housed in a separate business unit.
The restructuring is part of a larger organizational realignment announced by Mastercard in April 2024. The new structure centers around three key areas: Core Payments, Commercial & New Payment Flows, and Services. This strategic shift aims to accelerate growth, deliver increased value to shareholders, and enhance the company’s competitive advantage in the rapidly evolving payments landscape.
Mastercard CEO Michael Miebach emphasized the importance of this reorganization, stating,
“These changes will reinforce our strategy and competitive advantage to drive long-term growth, diversify our revenue streams and differentiate our products and solutions. Our teams will be able to execute faster and deliver more value to our partners and customers.”
The financial impact of this restructuring was hinted at during Mastercard’s recent earnings call. Chief Financial Officer Sachin Mehra announced that the company would record a one-time restructuring charge of $190 million in the quarter ending September 30, 2024. This charge is expected to cover the costs associated with the workforce reduction and other reorganization efforts.
Despite the challenges posed by the restructuring, Mastercard continues to demonstrate strong financial performance. In its second quarter earnings report, released on July 31, the company reported a 14% year-over-year increase in net revenue, reaching $6.3 billion. This growth underscores the resilience of Mastercard’s business model and the ongoing demand for its payment solutions.
Miebach acknowledged the mixed macroeconomic environment during the earnings call, noting, “Strength in consumer spending continues to be supported by a solid labor market and wage growth. While there are some signs of labor market growth moderating, this is off very strong levels of job creation. Also, inflation and interest rates remain in focus. We’ve seen inflation cool, but to varying degrees across carded and non-carded categories.”
Even as it navigates this restructuring, Mastercard continues to innovate and expand its product offerings.
Recent initiatives include the launch of a crypto-to-fiat card in partnership with Web3 platform MetaMask and cryptocurrency payments firm Baanx, enhancements to its open banking for lending program, and a collaboration with U.K. neobank Ampere to enable card-to-card payments.
