Struggling Business Forces Better Collective to Reduce Workforce
In a recent statement, Jesper Søgaard, co-founder and CEO of Better Collective, described the past few days as "emotional" due to bidding farewell to some colleagues as part of a staff reduction within the company.
The decision to part ways with some team members was not made lightly, and Søgaard remained confident that Better Collective will emerge stronger after navigating these difficult changes. He took the opportunity to thank everyone who has contributed to Better Collective's growth since its founding in 2004.
Better Collective, a company that has experienced continued growth, is currently facing a slowdown, particularly in Brazil and the United States. The company's expansion has made it more complex, necessitating an essential calibration of the overall organization and its investment strategies.
The struggles in the U.S. market and difficulties in the Brazilian market have contributed to the decision. Better Collective has experienced slower growth and revenue shortfalls in the United States, a critical market for their operations, due to increased competition and market saturation. In Brazil, the company has faced regulatory and market-entry challenges, negatively affecting growth prospects and profitability.
To stabilize the business and align with current market realities, Better Collective has initiated layoffs to reduce operational costs. Reflecting these challenges and the global economic context, the company has also adjusted its financial targets downward to more achievable levels, signaling caution and a more conservative outlook for growth in the near term.
As part of this strategy to navigate weaker market conditions, Better Collective has extended its share buyback program from September 5 to November 27, 2024. The share buyback program aims to repurchase up to EUR 20 million ($21.7 million) of the company's own shares.
Better Collective has already repurchased a significant number of shares. On October 21, the company repurchased 9,050 shares for SEK 2,010,745. On October 23, Better Collective repurchased 6,160 shares for SEK 1,340,105. On October 24, the company repurchased 11,000 shares for SEK 1,554,572. On October 25, Better Collective repurchased 7,000 shares for SEK 1,540,237. In total, Better Collective has repurchased 868,708 shares for a total of SEK 197,980,908 ($18.5 million), which corresponds to approximately 1.4% of its outstanding share capital.
Nordea conducted the share repurchase transactions on behalf of Better Collective. The company now holds these treasury shares, which it may use for various purposes, such as issuing shares, reducing the share capital, or transferring shares to employees.
Better Collective remains committed to securing long-term success and positioning for future market recovery. These changes aim to preserve financial stability while navigating the current challenges and preparing for future growth.
- Despite the recent staff reductions and ongoing challenges in specific markets like Brazil and the United States, Jesper Søgaard of Better Collective remains confident that the company will re-emerge stronger, requiring an essential calibration of their business, investing, and finance strategies.
- In response to the weaker market conditions, Better Collective has initiated a share buyback program, investing a significant amount to repurchase up to EUR 20 million worth of its own shares, with the goal of preserving financial stability and preparing for future market recovery.
