WiseTech Global will cut more jobs as artificial intelligence takes over more of its work, chief executive Zubin Appoo has flagged, and he says the cuts will not stop when the current program ends.
“We can never say that we’re done,” Appoo said on Wednesday, hours after the embattled logistics software company posted an 11 per cent fall in annual profit and its shares dropped more than 7 per cent.
About 1200 of the 2000 roles announced in February have gone. Appoo said most of the rest would come from exiting large parts of the professional services arm of e2open, the US company WiseTech bought last year for $US3.2 billion, and shifting that work to partner firms.
Further reductions would be routine rather than another large program, he said, but the company would keep testing what AI could absorb.
The cuts have been hard on the workforce. Appoo said it was a difficult transformation but the right thing to do, and that WiseTech had given staff training and tools to use AI whether they kept their jobs.
Appoo also defended founder Richard White, the company’s billionaire founder who remains an executive director and chief innovation officer while under investigation by the Australian Federal Police and the corporate regulator.
Asked what he would say to shareholders who blame White for the share price, Appoo said the founder was highly engaged and brought 32 years of history with the company and the industry. He cited White’s work on VerifyWise, a new compliance product. “The value that he adds there is important,” he said.
The AFP is investigating White over allegations first reported by this masthead that he coerced a former WiseTech cleaner into a sexual relationship and provided false information to secure her a visa. He denies the claims.
The Australian Securities and Investments Commission is separately examining more than $200 million in share trades he made during a company blackout period. The company has previously said White obtained independent legal advice before undertaking the trades.
Appoo said the investigations had not been a distraction and that the team had stayed focused on execution.
WiseTech’s results showed net profit fell to $US178.7 million for the year to June 30. Revenue jumped 79 per cent to $US1.4 billion, almost all of it from e2open. Operating expenses rose 92 per cent.
The CargoWise platform, the engine of the business, grew 11 per cent. The company had guided to 14 to 21 per cent.
Appoo said nothing had gone wrong. He blamed refinements made after the “value packs” pricing model went to 95 per cent of customers in December – a change that moved them off bespoke deals onto public pricing.
Josh Gilbert, lead analyst for the Asia-Pacific at eToro, said WiseTech was proving AI could take costs out of a business, but finding the next leg of growth was much harder.
“Zubin Appoo is running a leaner business, but rebuilding confidence and getting this business back to its best is a tough ask,” he said.
The result landed a week after WiseTech disclosed that the competition watchdog had executed a search warrant as part of an investigation into alleged breaches of competition law.
Appoo said it was “very early days” and referred further questions to the ASX announcement.
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David Swan is the technology editor for The Age and The Sydney Morning Herald. He was previously technology editor for The Australian newspaper.Connect via X or email.From our partners
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