Financial services technology provider, FIS (Fidelity National Information Services, Inc.) plans to cut “several thousand” staffers and contractors from a workforce that numbered about 65,000 at the end of last year.
The move comes after FIS shares have fallen 44% this year and after it was revealed that Stephanie Ferris, the company's current president, who wants to cut costs, will become president and CEO starting in January, according to Bloomberg on November 22.
Stephanie Ferris |
Ferris aims to restore investor confidence by reducing costs by $500 million in the coming quarters, according to the report.
“We are focused on permanently reshaping our cost structure through both cost-reduction and containment initiatives,” Ferris told investors this month, as per the report.
“These include actions surrounding the optimization and reduction of vendor spend, the outsourcing of non-value-added activities, and reviewing and rightsizing the current workforce.”
According to the report, investors' worries about consumers cutting back on their spending in response to difficult economic conditions, a trend that affects the company's merchant acquiring division of business, have caused the stock price of FIS to decline.
“What you will never see us do is make cuts such that we will impair the ability for the business to grow or it will impact our customers,” Ferris said, per the report.
FIS did not respond to the matter.
Companies in the “Pay and Be Paid” sector have been challenged by the fact that consumers are bedeviled by inflation. Most immediately, the pressures are being felt in the lower- and middle-income tiers, and those consumers are pulling back a bit.
For example, FIS shares have sunk within its merchant segment, with organic growth slowing. The company noted in its Nov. 3 earnings report that U.S. consumers are shifting their spending behaviour to more discretionary verticals, which is in turn pressuring yield in the segment.