Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Xero quits developing in-house US payroll product

Xero quits developing in-house US payroll product, signs up with Gusto

By Paul McBeth

July 20 (BusinessDesk) - Xero has stopped developing a payroll product in the US and will instead team up with existing payroll services provider Gusto, integrating their respective platforms.

The Wellington-based, ASX-listed company today said the decision to stop development will incur an impairment charge of $16.2 million in the first half of the March 2019 year, freeing up resources to work on payroll in other markets, where Xero already covers 1.25 million employees. Gusto already handles all aspects of payroll for small business owners across 50 US states, and Xero expects the tie-up will make its North American offering more attractive.

"The strategic alliance with Gusto is an important step in the implementation of our US growth strategy," chief executive Steve Vamos said in a statement to the ASX. "This strategic alliance allows us to focus our investment in our payroll product and brings important financial benefits and more efficient deployment of our resources as we execute our growth strategy."

In May, Xero closed in on reporting its maiden profit, with positive earnings before interest, tax, depreciation and amortisation. It's been focusing more closely on improving its efficiency, with wider gross margins coming from the cheaper hosting costs using Amazon Web Services.

Xero went through a period of change in the 2018 year, with founder Rod Drury stepping back from the management of the company, replaced by former Microsoft Australia and New Zealand head Vamos, and de-listing from the NZX to take up a sole listing on the ASX, in a bid to boost global fund managers' ability to hold Xero as it heads towards profitability.

The ASX-listed shares rose 1.8 percent to A$46.11 today.

The integration of the platforms is expected to be completed by early 2019.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>

ALSO:

Price Of Cheese: Fonterra CEO Goes Early After Milk Price Trimmed

Aug. 15 (BusinessDesk) - Fonterra Cooperative Group chief executive Theo Spierings is leaving the role early after the world's biggest dairy exporter lowered its farmgate payout and trimmed its dividend to retain cash. More>>

ALSO:

9.2 Percent: Gender Pay Gap Second-Smallest On Record

This is the second-smallest gap since the series began 20 years ago. In comparison, the gender pay gap was 9.1 percent in 2012 (the lowest on record) and 9.4 percent last year. More>>

ALSO:

Forest & Bird: Report Find Council Failures On Effluent

The report exposes significant inconsistencies and gaps in how regional councils are enforcing the rules around dairy effluent management. More>>

ALSO:

Mana In Mahi: Helping Young New Zealanders Into Work

Thousands of young people will be given the chance to gain valuable qualifications and meaningful work under the Mana in Mahi – Strength in Work scheme launched by Prime Minister Jacinda Ardern today. More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and into 2020, longer than we projected in our May Statement. The direction of our next OCR move could be up or down. ... More>>