Wirecard lays off over 50% of staff amid insolvency process

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Wirecard, the German financial services company in the midst of insolvency proceedings, has announced that it will be laying off 730 employees, more than 50% of its staff. The firm is planning to let go of 730 of the 1,300 workers at its Aschheim office, cutting its total number of employees down to 570.

In a statement, Michael Jaffé, the lawyer appointed to prepare Wirecard for dismantling so that it can be sold said, “The economic situation of Wirecard AG was and is extremely difficult in light of the lack of liquidity and the well-known scandalous circumstances,” which may have induced the massive lay-off that we are seeing.

“The usual restructuring and cost-adjustment measures are therefore not sufficient,” said Jaffé, “as such a massive loss situation is not feasible at full cost in the insolvency proceedings.”

Subsequently, Wirecard administrators said that “far-reaching cuts” were mandatory if the firm wanted to “make any kind of continuation possible.”

The Wirecard scandal

Wirecard has been facing adversity since it came up $2.1 billion short in its latest audit. Since then, Wirecard’s former CEO, as well as three other top managers, have been taken into custody, it’s former COO, Jan Marsalek, went on the run, and the company filed for insolvency. Unfortunately, Wirecard’s accounting scandal affected its digital currency clients that relied on Wirecard to issue and provide service for their digital currency debit cards.

Recently, Wirex announced that Railsbank would be their new digital currency debit card issuer in the APAC region due to its former card issuer Wirecard’s insolvency. It was also revealed that Railsbank would be purchasing Wirecard’s U.K subsidiary and that the deal should be complete in November; and that Wirecard’s Brazilian business would be sold to PagSeguro Digital.

“It is particularly pleasing that the sale of Wirecard Brazil has been the first success with respect to the sale of assets,” said Jaffé, “because the framework conditions of the Wirecard insolvency proceedings have been, and still are, very difficult.”